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Pennant Financia
50 Posts |
 Posted - 09/26/2008 : 2:56:25 PM
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2008-09-26
"Wachovia, who at last count owned $122bb of the most toxic loan every created (the Pay Option ARM), has taken on an aggressive initiative with mortgage brokers/bankers to help them refi their way out of their financial troubles. They hope to refi about 30% or 135k loans over the next couple of years. The Pay Option ARM, in part, just took WaMu down and many think Wachovia will be next." |
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lucky1s
4071 Posts |
Posted - 09/26/2008 : 2:59:28 PM
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Yes.
Soon to be JP Wachovia World. |
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jscorbett
4602 Posts |
Posted - 09/26/2008 : 2:59:57 PM
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| them or National City.. |
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lucky1s
4071 Posts |
Posted - 09/26/2008 : 3:01:30 PM
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| I think National City will be allowed to fail wheras Wachovia will be more like the wamu thing. |
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Pennant Financia
50 Posts |
Posted - 09/26/2008 : 3:05:49 PM
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| And to think, back in 2002-2004 those "Whichovia" Rep's would come into our office and camp-out to sell us their pay option program. Even if it was not the best out-come for the borrower- greedy LO'S were lining their pockets with YSP's and "Whichovians" Rep's were rolling in the volume. |
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Pennant Financia
50 Posts |
Posted - 09/26/2008 : 3:08:28 PM
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Here is the kicker...:
To remove any incentive for borrowers to “purposely default,” the borrower must have had a mortgage debt-to-income ratio of no less than 35 percent as of March 1, 2008
Most Californians are paying over 50% of what the they make on their mortgage. Wachovia will have to reduce the principle 50% in order for these people to stay in their home. It’s the only way it will work and I just don’t see it happening.
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johnnyboy38109
4665 Posts |
Posted - 09/26/2008 : 3:10:49 PM
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| yes. |
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Pennant Financia
50 Posts |
Posted - 09/26/2008 : 3:17:39 PM
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99% of borrowers in California were STATED INCOME/SISA/NINJA LOANS along with the 135,000.
1. They can't refi- most LO/Borrower's “lied” about their income to qualify in the first place.
2. And now must prove income documentation?
Say goodbye to Wachovia…
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Agent_Mike
1592 Posts |
Posted - 09/26/2008 : 3:34:28 PM
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quote:
Originally posted by Pennant Financial
99% of borrowers in California were STATED INCOME/SISA/NINJA LOANS along with the 135,000.
1. They can't refi- most LO/Borrower's “lied” about their income to qualify in the first place.
2. And now must prove income documentation?
Say goodbye to Wachovia…
99% of loans in CA weren't full doc, huh? I like how you just pulled that out of your butt.
Unlike other institutions, Wachovia has a chance of surviving because it is first and foremost, a depository, and most of their option arm exposures were portfolios. Be that as it may that their exposure was huge, but did anyone forget how conservative Wachovia's appraisal cuts were? That should be a slight buffer.
Wachovia actually has the capacity and will to work with the troubled borrowers to create a solution. They have a chance ... |
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FundStar14
1107 Posts |
Posted - 09/26/2008 : 4:39:53 PM
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| YES--Stick a fork in them... |
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Pennant Financia
50 Posts |
Posted - 09/26/2008 : 4:45:07 PM
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mudshark
3923 Posts |
Posted - 09/26/2008 : 5:04:15 PM
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| Now that MS jumped all over the WAMU carcass, the GS gunsights are on Wachovia. |
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MisterVA
9254 Posts |
Posted - 09/26/2008 : 5:26:42 PM
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| For months after the proclamation that Option ARMs were a financial time bomb, Wachovia was still pushing them and many folks here on BO were still asking for them. Some of you may still be around. Talk about going straight on a curve. |
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Pennant Financia
50 Posts |
Posted - 09/26/2008 : 9:59:07 PM
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quote:
Originally posted by MisterVA
For months after the proclamation that Option ARMs were a financial time bomb, Wachovia was still pushing them and many folks here on BO were still asking for them. Some of you may still be around. Talk about going straight on a curve.
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FARCRY
23 Posts |
Posted - 09/26/2008 : 10:11:07 PM
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They have been reporting this on CNBC this afternoon.
"Wachkovia" is in "discussions" with 3 firms: Citi, Banco Spain a few more mabye.
It's being reported as "They might need to do something if the bailout package isn't passed." |
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FARCRY
23 Posts |
Posted - 09/26/2008 : 10:22:12 PM
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The market value of Wachovia was about $21.6 billion as of Friday's market close, Reuters data show. Citigroup's was $109.7 billion, Santander's was $99.8 billion and Wells Fargo's was $123.4 billion, the data show.
Who is Santander's ? |
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Pennant Financia
50 Posts |
Posted - 09/26/2008 : 10:23:23 PM
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| Santander is Spain's largest bank. |
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psantos
577 Posts |
Posted - 09/27/2008 : 06:11:00 AM
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They deserve their fate, I have never seen a more abused loan product, than their Option Arm, they were the King of Neg Am loans.
I remember their commercials, touting the advantages of the OA, explaining how borrowers could buy\afford a bigger house, with the loan. THIS WAS NOT HOW THE LOAN WAS TO BE USED!
The reps selling point was always YSP,YSP!
A good friend has an OA mortgage with them, I'm gonna try to get a loan modification for him. They also apparently are the most unwilling to negotiate with their customers!
Karma is a biatch! |
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ppulatie
2405 Posts |
Posted - 09/27/2008 : 08:25:03 AM
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Mike,
What you say sounds good on paper, but that is all. The World loans are going belly up just like WAMU.
World cut appraisals by 10%, but the market has completely blown through that. World took credit scores in the 5's, if there was equity. Their loans were "heartbeat" loans.
They will be Citi soon.
quote:
Originally posted by Agent_Mike
quote:
Originally posted by Pennant Financial
99% of borrowers in California were STATED INCOME/SISA/NINJA LOANS along with the 135,000.
1. They can't refi- most LO/Borrower's “lied” about their income to qualify in the first place.
2. And now must prove income documentation?
Say goodbye to Wachovia…
99% of loans in CA weren't full doc, huh? I like how you just pulled that out of your butt.
Unlike other institutions, Wachovia has a chance of surviving because it is first and foremost, a depository, and most of their option arm exposures were portfolios. Be that as it may that their exposure was huge, but did anyone forget how conservative Wachovia's appraisal cuts were? That should be a slight buffer.
Wachovia actually has the capacity and will to work with the troubled borrowers to create a solution. They have a chance ...
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McSolo
339 Posts |
Posted - 09/27/2008 : 09:10:08 AM
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| Wachovia/worlds pay option arm was a great tool for investors who can manage their money. Paying the lowest amount allowing max cash flow and at end of the year pay off the negative amortization. It was product created for sophisticated disciplined self employed or investors. It is tragic that it has ended and tragic that it was sold to those who could not manage it as it was planned. this too shall pass but so will wachovia.... |
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psantos
577 Posts |
Posted - 09/27/2008 : 10:02:03 AM
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quote:
Originally posted by McSolo
Wachovia/worlds pay option arm was a great tool for investors who can manage their money. Paying the lowest amount allowing max cash flow and at end of the year pay off the negative amortization. It was product created for sophisticated disciplined self employed or investors. It is tragic that it has ended and tragic that it was sold to those who could not manage it as it was planned. this too shall pass but so will wachovia....
Unfortunately, overwhelmingly, it was sold to the borrower who has no understanding of its original intent. The entire industry: lenders, borrowers, brokers abused the product unmercifully.
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lucky1s
4071 Posts |
Posted - 09/27/2008 : 11:06:50 AM
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I was competing for a loan with a retail wachovia guy pushing the world pick-a-pay.
You should have seen the smoke and mirrors package given to the borrowers.
And this was in 2008.
And yes, I lost the loan to them. |
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Pennant Financia
50 Posts |
Posted - 09/27/2008 : 3:17:57 PM
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quote:
Originally posted by lucky1s
I was competing for a loan with a retail wachovia guy pushing the world pick-a-pay.
You should have seen the smoke and mirrors package given to the borrowers.
And this was in 2008.
And yes, I lost the loan to them.
Back in 2002, I can remember how LO's were selling the Pick-A-Pay program, Clearly, not once did they inform the borrower that it would be a neg-am loan, all they were concerned with is how many points they were charging and the YSP- I called a LO meeting and shared my concerns, the feed back was terrible. All the BM was concerned with was how much he would be making in originations and closings and asked why I was so concerned for the Borrower's sake "Don't get emotionally involved" needlees to say, that, that BM is out of business and loosing his home to foreclsure- what comes around goes around. KARMA is a B**ch!!! |
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FundStar14
1107 Posts |
Posted - 09/27/2008 : 10:29:02 PM
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quote:
Originally posted by McSolo
Wachovia/worlds pay option arm was a great tool for investors who can manage their money. Paying the lowest amount allowing max cash flow and at end of the year pay off the negative amortization. It was product created for sophisticated disciplined self employed or investors. It is tragic that it has ended and tragic that it was sold to those who could not manage it as it was planned. this too shall pass but so will wachovia....
It was a great product for a very few investors that knew what they were doing. Unfortunately most people didn't understand the loan. Every Wachovia/World AE was pushing the Pick-A-Pay on every broker shop they entered. Our shop said we don't do neg am loans and our rep laughed at us and looked at us like we were crazy..... Seriously, she was so brainwashed by World she didn't understand what the product was doing to the consumer and thought we were idiots for not doing them and raking in huge amounts of cash...... She was the idiot..... Needless to say we lost a lot of loans and money to shops who did Option Arms and the AE in question is out of a job. Wachovia should and will burn for this...... |
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LoanPro71
4841 Posts |
Posted - 09/27/2008 : 11:42:34 PM
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quote:
Originally posted by FundStar14
quote:
Originally posted by McSolo
Wachovia/worlds pay option arm was a great tool for investors who can manage their money. Paying the lowest amount allowing max cash flow and at end of the year pay off the negative amortization. It was product created for sophisticated disciplined self employed or investors. It is tragic that it has ended and tragic that it was sold to those who could not manage it as it was planned. this too shall pass but so will wachovia....
It was a great product for a very few investors that knew what they were doing. Unfortunately most people didn't understand the loan. Every Wachovia/World AE was pushing the Pick-A-Pay on every broker shop they entered. Our shop said we don't do neg am loans and our rep laughed at us and looked at us like we were crazy..... Seriously, she was so brainwashed by World she didn't understand what the product was doing to the consumer and thought we were idiots for not doing them and raking in huge amounts of cash...... She was the idiot..... Needless to say we lost a lot of loans and money to shops who did Option Arms and the AE in question is out of a job. Wachovia should and will burn for this......
Absolutely 100% true.
I think we all had this EXACT same experience with World A/Es ... brainwashed and blinded by YSP ... indeed.
My prediction .... Wachovia will go down ... or be "acquired" by next Friday.
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SolarMTG
473 Posts |
Posted - 09/28/2008 : 08:56:42 AM
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| If the bailout does not go through, they will merge. If the bailout does go through, they will sell their POA's to the Gov't and get off the hook. |
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McSolo
339 Posts |
Posted - 09/29/2008 : 06:06:40 AM
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Well, all the above was correct hasta la vista wachovia/world. Now those brainwashed workers will become low salaried clerks for Citi.
Again, we have killed the good product (investors/self employed/sales persons who benefited from pay option) by believing everyone should have it. This too shall pass.... |
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LoanPro71
4841 Posts |
Posted - 09/29/2008 : 10:37:13 AM
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quote:
Originally posted by McSolo
Well, all the above was correct hasta la vista wachovia/world. Now those brainwashed workers will become low salaried clerks for Citi.
Again, we have killed the good product (investors/self employed/sales persons who benefited from pay option) by believing everyone should have it. This too shall pass....
If there wasn't an income tax, all of this would be a non-issue.
Then, we could just use bank statements or asset account statements for Full Doc and our lives as Mortgage Brokers would be much easier.
In a perfect world, I suppose.
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