Wachovia Loses $8.9B, Exits Wholesale Mortgage

NewsMax Money News ^ | July 22, 2008

[2ndDivisionVet]

Bad news.

[Viking2002]

Let me just say that it was 'in the wind' for quite a while. And from certain insider standpoints, it was poetic justice for the arrogant bastards. A lot of people paid for that arrogance.

[RightWhale]

Its shares fell $1.67, or 12.7 percent, to $11.51 in premarket trading.

Something wrong with those numbers. Stock 14.42 after several days.

[Riley]

Heh. I just applied for a mortgage to them- and got turned down.

[Perdogg]

This was reported earlier in the week. They took on a mortgage company and got burned. They should be okay, I hope, because I have be doing business with “Watch-over-ya” (cause they watch over your money) for 25 years.

Their stock went up this week and, it’s s long climb, but the shareholders seem to approve of the action of new CEO to absorb the hit.

[NautiNurse]

I've been banking with First Union/Wachovia for about 25 years, and I'm a shareholder too. This NewsMax info is days old. Since the RIF and mortgage dump, the new CEO has purchased 1 million shares of WB.

I was pleased to see the shares creeping back up from single digits the week before.

[grey_whiskers]

How many of the bad loans were to illegal aliens?

I'm wondering if enough of the loans go bad, then, will the pressure on the govt. from business interests for shamnesty go away?

Cheers!

[delacoert]

they also reflect performance for which we at Wachovia accept responsibility

The statement no longer has any meaning. Who is we? What does taking responsibilty mean? It usually means 10,000 peons get layed-off, retirement funds get rifled, and the board of directors get a bonus.

[RightWhale]

The price was falling like off a cliff, then suddenly bounced right up. Just before the report some analysts had picked Wachovia as a buy. The stock had probably fallen too far to quickly. At 8 it was a deal, but nobody was prophesying then. .

[BunnySlippers]

Oh please let my CD expire first. I’ve already done my time with the FDIC and IndyMac this month.

[NautiNurse]

It usually means 10,000 peons get layed-off, retirement funds get rifled, and the board of directors get a bonus.

Just another evil corporation--they should all be owned and run by the feds. That would make everything better. Amen.

[delacoert]

Just another evil corporation--they should all be owned and run by the feds. That would make everything better. Amen.

Just more words from a sharp in a suit.

[autumnraine]

I just found out my mortgage company (CIT, a fairly large company) is bankrupt and I now have a mortgage with an unknown company.

[NautiNurse]

I can’t deny I’ve increased my WB holdings in the past few weeks while the stock was plummeting. Wachovia did the right thing by preparing Wall Street for the bad news. By the time they released their 2Q report, all the bad news was already out there. No surprises, except for the absolute number for RIF and a simultaneous drop in oil prices.

[NautiNurse]

Just more words from a sharp in a suit.

ROFL! Are you another one of FR's token liberals that are kept around for amusement?

[NautiNurse]

I now have a mortgage with an unknown company.

Have no fear, you will be notified posthaste where to send the next payment. ;o)

[econjack]

I had a similar experience with US Bankcorp. I bought 100 shares a few months ago for around $31. Then, after the Freddies-Fanny mess, I looked at USB and the shares were a little north of $22. I quickly looked at USB data again because my original work showed they had very little subprime debt. Since that proportion had actually declined, I jumped in for another 900 shares. By the end of the week it had rebounded to over $30, then fell back to around $28.

So what happened? People overreacted to Freddies-Fanny and financials dropped as people bailed out. However, for many finanacials, the fundamentals were solid enough to recognise it as a panic selloff and people picked up shares at bargain prices.

Should you and I see our tax money used to bail out greedy partners who ignored all the red flags and made loans to people who never had the ability to pay them back? No. The borrowers bought ARM's with no money down in hopes of flipping the house before the ARM came due. The lenders thought the liberal terms would increase business (which it did) and thought the continually-rising real estate market would cause refinancing and more fees when the ARM came due. This was a private transaction and I can't believe Congress approved bailing these parties out with public money. The whole lot should be tarred and feathered, then thrown out of office.

[PAR35]

FDIC closed a couple of small banks (Calif and Nevada) yesterday.

[JasonC]

They bought Golden West at the very tippy top. A giant California S&L that specialized in adjustable rate mortgages with new fangled "they can't default if the loan terms say never pay us back unless you feel like it" bells and whistles. Paid something like $25 billion for it. If they had waited a year they could have had it for free in a Fed orchestrated rescue operation. CEO lost his job over it. The new guy, whose is from Goldman, could do better. But they got here the old fashioned way - blind idiocy.

[JasonC]

CIT isn't bankrupt. Its stock is down 87% from the highs, but it is still alive. They did however sell off their mortgage business, to a private buyout firm in Texas called Lone Star. Buffett's Berkshire Hathaway also did a deal with them, taking over their business lending money on prefab manufactured houses. CIT is therefore no longer in the mortgage business, but they haven't defaulted on anything and they aren't in bankruptcy. I hope this helps.