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Posted on 12/26/2008 8:38:29 PM PST by rabscuttle385
In front of a ballroom full of N.C. bankers in January 2006, Wachovia chief executive Ken Thompson warned of the dangers of “toxic” home loans.
A problem with so-called option adjustable-rate mortgages, he told the group, was that homeowners can end up owing more at the end of the month than the beginning, which can be a “tough situation” for customers and lenders.
“I have literally been amazed at the terms offered by some mortgage lenders, thankfully not at Wachovia and thankfully not so much in North Carolina,” he said.
Four months later in May 2006, Thompson took a $24 billion plunge into the mortgage business by buying Oakland, Calif.-based Golden West Financial. Its specialty? The same loans he had cautioned against: option ARMs.
Wachovia, a brand known for conservative lending, had changed course and forged its biggest deal ever. Two and a half years later, the purchase has played a central role in the Charlotte bank's near collapse and its planned sale to San Francisco-based Wells Fargo. Shareholders vote Tuesday on the takeover.
(Excerpt) Read more at charlotteobserver.com ...
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Four months later in May 2006, Thompson took a $24 billion plunge into the mortgage business by buying Oakland, Calif.-based Golden West Financial. Its specialty? The same loans he had cautioned against: option ARMs.
Wachovia, formerly one of the most conservative and best run large regional banks in the country, began rapidly circling the bowl immediately following their acquisition by First Union, a bunch of highly questionable, go-go idiots if there ever was one. First Union needed a good name, since they'd ruined their own. They found one in Wachovia, for a short while at least, until the old habits came to the fore once again.
Better than me. I was banking with Citifail until the whole thing blew up this fall, and now that they sold my credit card to Bank of America, I'm leaving them for good.
Is this one we need?
I was offered a job at First Union several years ago. They wanted me to write software to tell the mortgage traders which packages of loans had the best value. They were especially interested in finding values missed by other banks offering bundles of mortgages for trade.
Freepers, was Golden West Financial the company whose founders were lampooned on SNL about a month ago?
Herb and Marion Sandler’s involvement in Golden West/Wachovia cannot be told enough. They are responsible.
It’s time for conservatives to stop blaming a company name and start blaming the PEOPLE in charge.
Companies don’t kill markets and fortunes. PEOPLE kill markets and fortunes.
Come to think of it, I think they pulled the video of the interview pretty quickly. What were their names?
Thank you!
Sounds like it did not work.
“I’m actually relieved they’re being taken over by Wells Fargo rather than Citi. “
So am I. Working for a bank who chose to be conservative when conservative wasn’t cool, is now a good thing.
I turned the job down.
You nailed it perfectly.
Ironically, what we are seeing today bears an uncanny resemblance to the similar rampant stupidity and reckless greed we saw in the years that led to the RTC, and before that the REIT fiasco. It seems like every 20 years or so the bankers find a new scheme to get themselves into trouble and send their institutions down the toilet. Bail these idiots out?
Talk about failing to learn from history... Whew. I think the people in charge should go to freaking jail.
Just for raw stupidity alone.
sure was
I did not mean that. Referring to the programmer hired.
It wasn’t just that they bought Golden West, they were nutty enough to pay a large premium for it. that is an indication that they found no problems with the lending practices. That is why they continued them and changed Wachovia into the Golden West model of giving it away.
Since Citi bought my credit card from MBNA (perhaps the best of the credit card banks) and then immediately flipped to to Nationsbank several years ago, I haven't had any problems with NationsBank/BofA.
Now BankOne was an organization that earned its low reputation. And Chase seems to have an affinity for Sunday due dates now that they are JPMorganChase.
I'm still trying to figure out who canceled my card a few weeks ago - no bank name on the letter, just the last 4 digits from the card.
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