Comments on: Wachovia Bank http://bankimplode.com/blog/2008/10/03/wachovia-bank/ Wed, 23 Sep 2009 21:43:37 -0400 http://wordpress.org/?v=2.8.1 hourly 1 By: Lender Implodes - http://bankimplode.com/blog/2008/10/03/wachovia-bank/comment-page-1/#comment-562 Lender Implodes - Tue, 22 Apr 2008 19:18:03 +0000 http://bankimplode.com/blog/?p=71#comment-562 [...] Wachovia - $4.8B [...] [...] Wachovia – $4.8B [...]

]]> By: Aaron http://bankimplode.com/blog/2008/10/03/wachovia-bank/comment-page-1/#comment-179 Aaron Sun, 02 Mar 2008 01:07:46 +0000 http://bankimplode.com/blog/?p=71#comment-179 Steve Carroll: I think you fail to apprehend the problem for Wachovia/World Savings here. The entire state of California was an inflated market, regardless of World Savings' underwriting and appraising acumen. Even "fair and honest" values in the bubble were inflated values. The value of the collateral -- all collateral -- has thus dramatically fallen from the peak. So this has nothing to do with faulting or attacking World Savings; it is more a realistic observation of bubble credit dynamics. We'll see how bad it gets for the World Savings legacy portfolio, but I suspect there will be sizeable writedowns, and crimpings to Wachovia's cash flow involved. Being the "best option ARM portfolio in California" may not be a lot of consolation. Especially to Wachovia's investors. Steve Carroll:

I think you fail to apprehend the problem for Wachovia/World Savings here.

The entire state of California was an inflated market, regardless of World Savings’ underwriting and appraising acumen. Even “fair and honest” values in the bubble were inflated values. The value of the collateral — all collateral — has thus dramatically fallen from the peak.

So this has nothing to do with faulting or attacking World Savings; it is more a realistic observation of bubble credit dynamics. We’ll see how bad it gets for the World Savings legacy portfolio, but I suspect there will be sizeable writedowns, and crimpings to Wachovia’s cash flow involved.

Being the “best option ARM portfolio in California” may not be a lot of consolation. Especially to Wachovia’s investors.

]]> By: m.stanton http://bankimplode.com/blog/2008/10/03/wachovia-bank/comment-page-1/#comment-156 m.stanton Thu, 21 Feb 2008 02:10:56 +0000 http://bankimplode.com/blog/?p=71#comment-156 Lets face facts the loans (World Savings) they are doing are off their own index COSI (cost of savings) and CODI (cost of deposits) which have no bearing in the real world as far as Secondary Marketing is concerned. These loan can not be pooled and sold in the Secondary Market and have to remain on the portfolio. Whether you call it 3 Mile Island or Love Canal the products are toxic and it is only a matter of time before they are negatively impacted. I am suprised that Wall Street has not brought this to light durning a earnings call. The bottom line Wachovia never has made good decisions regarding their mortgage operations. John Robbins (AmNet/Vertice) former MBA President was completely silent and never took a position during this crisis and Charlotte Catolfo (Vertice) is way over her head. The Correspondent program never received support from Corporate and was eventually shut down, plus the wholesale division was shut down and eventually restarted. This is not a time for Wachovia to be managing another White Elephant and if they had a clue would shut down Vertice and all of thei mortgage operation except retail. Good luck. Lets face facts the loans (World Savings) they are doing are off their own index COSI (cost of savings) and CODI (cost of deposits) which have no bearing in the real world as far as Secondary Marketing is concerned. These loan can not be pooled and sold in the Secondary Market and have to remain on the portfolio.
Whether you call it 3 Mile Island or Love Canal the products are toxic and it is only a matter of time before they are negatively impacted. I am suprised that Wall Street has not brought this to light durning a earnings call.
The bottom line Wachovia never has made good decisions regarding their mortgage operations. John Robbins (AmNet/Vertice) former MBA President was completely silent and never took a position during this crisis and Charlotte Catolfo (Vertice) is way over her head. The Correspondent program never received support from Corporate and was eventually shut down, plus the wholesale division was shut down and eventually restarted.
This is not a time for Wachovia to be managing another White Elephant and if they had a clue would shut down Vertice and all of thei mortgage operation except retail. Good luck.

]]> By: Steve Carroll http://bankimplode.com/blog/2008/10/03/wachovia-bank/comment-page-1/#comment-155 Steve Carroll Thu, 21 Feb 2008 01:43:10 +0000 http://bankimplode.com/blog/?p=71#comment-155 The article mentions World Savings(Now Wachovia Portfolio) success was only the result of "high underwriting standards," and that this model won't hold up in this market. However this writer fails to mention another important factor in the success of World Savings-their appraisals. These portfolio loans put an emphasis on collateral-getting the exact value of a house. World Savings never pushed a value of a house just to make a loan work. They still use their own appraisers, and are among the best in the industry. Unlike so many other lenders who used inflated values and fraudelent appraisals, World Savings always put their borrowers in a house with an accurate value. Many brokers refused to work with World Savings during the boom because they couldn't use their own appraiser who would push a value for them to make a loan work, in turn putting their borrower in a house with a value inflated drastically. As we'll see as the year goes on, more and more borrowers will default at historic levels, but I would bet on Wachovia to have their foot firmly planted when the dust settles. The article mentions World Savings(Now Wachovia Portfolio) success was only the result of “high underwriting standards,” and that this model won’t hold up in this market. However this writer fails to mention another important factor in the success of World Savings-their appraisals. These portfolio loans put an emphasis on collateral-getting the exact value of a house. World Savings never pushed a value of a house just to make a loan work. They still use their own appraisers, and are among the best in the industry. Unlike so many other lenders who used inflated values and fraudelent appraisals, World Savings always put their borrowers in a house with an accurate value. Many brokers refused to work with World Savings during the boom because they couldn’t use their own appraiser who would push a value for them to make a loan work, in turn putting their borrower in a house with a value inflated drastically. As we’ll see as the year goes on, more and more borrowers will default at historic levels, but I would bet on Wachovia to have their foot firmly planted when the dust settles.

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