Wachovia Likely Shutting Down Wholesale Lending

Posted on July 21st, 2008 in Daily Mortgage/Housing News - The Real Story, Mr Mortgage's Personal Opinions/Research

FYI… From the ML-Implode main site. This was not an ‘if,’ but rather a ‘when.’ -Best, Mr Mortgage <>

We are hearing about the impending shutdown of wholesale mortgage operations at Wachovia. This morning, we received the following:

“Wachovia wholesale is shutting down today. Press release at 1PM.”

“All us reps were told this morning by top managment that wholesale will be completely shutdown by August 31st and a conference call will be this afternoon. All reps were called Sunday afternoon on the east coast…both Portfolio and marketable products.”

The info is coming in from various sources including tipsters, forum members and outside sources – many of whom are (or were) Wachovia employees. We have no detailed information at this point on the number of people who will be affected.

An email sent to brokers by one AE says:

“Good Morning just wanted to let you know that we learned last night that today Wachovia will announce its closing its Wholesale division.

There will be a conference call at 1 pm and I will send out a follow up to that call.”

From their web site: “Today’s Wachovia was created when First Union Corporation acquired the former Wachovia Corporation and changed its name to Wachovia.” That merger occurred in September of 2001; some may also recall First Union’s acquisition (and subsequent shutdown) of then-subprime-giant “The Money Store” just a year prior. Many analysts and pundits have pointed to Wachovia’s acquisition of Golden West Corporation, parent holding company of World Savings Bank in Oakland, CA in October of 2006 as a cause for recent woes over their $120 billion portfolio of Pay Option ARMs, referred to as “Pick-a-Pay” or “PAP” loans.

Wachovia Corporation will be announcing their second quarter earnings tomorrow, 2008-07-22. From an AP article on Yahoo!Finance:

“Wachovia said it has set aside $4.2 billion pretax to cover bad loans for the quarter, leading to an estimated second-quarter loss of about $2.6 billion to $2.8 billion, or between $1.23 and $1.33 per share, excluding a goodwill write-down.”

6 Responses to “Wachovia Likely Shutting Down Wholesale Lending”

  1. It’s too bad for all the brokers who knew what they were doing and loved dealing with World Savings.

    I have several clients who’ve lost jobs here in Southern California during the downturn and are making the minimum payment on their World Savings loan (doesn’t everyone?). These were the kind of people who didn’t want to sell their home, so their only affordable loan option was the Neg AM. And World gave them 10 years (or 125%) before the re-cast would take effect.

    World had an excellent program for all those years and were the most realistic with regard to home value. Hopefully, Wachovia spins World Savings back off again.

    AV

  2. Wachovia spent it’s stock & cash like a drunken sailor.
    I live in N. TX the past year WAC was building banks on every corner.
    WAC bought AG Edwards at market top.

    WAC was a ROLL UP – it tried to BUY growth.

    Management should be BANNED from ever handling money again.

  3. Au contraire ! Wachovia management should get a promotion to work in Washington. I am listenig to that jerk this morning Paulson. You are going to pay up your noooossseee!
    It’s nice that these bastards at Goldman Sachs have all these slaves to pay for all their caca. Slavery by another name.

  4. Paulson will do for the Treasury what Greenspan did for the Fed and Mr. B. is continuing to do…

    The American tax payer will now “Bail Out” everyone possible and our taxes are about to go through the roof!!!

    Current “Bail Out” List:

    Bear Stearns
    IndyMac
    Freddie Mac
    Fannie Mae
    RE Speculators
    RE Investors

    Current “Bail Out” Watch List:

    FED
    FDIC
    Sally Mae
    GM
    ANY Home Owner under water

    Future “Bail Out” List:

    Wachovia
    Washington Mutual
    Citi
    Bank of America

    NOTE: There will be NO “Bail Out” for anyone that was responsible or prudent. They will pay for those that were not however!!!

    So what does this all mean for “We the People”?

    Well it certainly means that many things will go a lot HIGHER now…

    HIGHER taxes, HIGHER interest rates, HIGHER default rates, HIGHER foreclosure rates, HIGHER inflation, HIGHER unemployment.

    Also many things will go a lot LOWER now as well…

    LOWER wages, LOWER growth, LOWER tax revenue, LOWER level of services, LOWER number of home owners.

    So “We the People” will be getting JUST WHAT WE ASKED FOR when we voted the clowns into office yet again. Now maybe some of us that have not learned how this works will finally wake up and learn… maybe?

    VOTE EVERY SINGLE INCUMBANT OUT OF OFFICE NEXT ELECTION

    Let’s all send a very clear and meaningful message that we will NOT tolerate this incompetence any longer and give a new round of politicians a chance to correct these past mistakes. That or we do it all again next election and again the following one if needed. Personally I do it every election and have been for the last couple of them. I will continue to do so regardless of how well they do because I think the biggest issue is lobbyist, and without a standing force in office they are rendered useless… the way it should be!!!

  5. Know what ? Paulson works for his clients. The Chineese, the Saudis and his buddies at Goldman Sachs. As for the average american ? Who cares !

  6. Hey the more you lay off people and the more you destroy the economy the more the dollar goes up ! Fantastic ! Whachovia should of fired 50,000 people !

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