Wachovia Corporation Company is one of the largest financial services company in the US. Mortgage lending business was its primary activity and when the Real Estate business was at its best during the boom years between 2000 and 2005, this Charlotte, North Carolina based financial corporation thrived in extending home loans. Hundreds of thousands of home loans were issued to barrowers, who evinced interest in buying housing properties in prime locations of California, Florida, Nevada, and Arizona, which are top States in foreclosure listings today.
Like most of the Banks, Wachovia Corporation had the laxity in checking the repayment capacity of the barrowers during the hay days of US Real Estate, when people went crazy in home buying with financial assistance from Banks. The barrowers with such free availability of loans went for buying properties that are never affordable by them, proportionate to their monthly income. When the downturn of US economy occurred in the later part of 2005, it brought forth cyclical effects in the financial markets. Interest rates on barrowing shot up as never before – at times 50 to 60% higher than what they were earlier. With the result many American families found the installments of mortgage repayment swelling beyond their monthly budget and therefore defaulted.
The mortgage lenders like Wachovia Corporation, inspite of their best efforts to help the barrowers come out of the fix by compromises – modification of loan terms; adjustment of interest rates; accepting only interest payments for certain period of time etc. – could not stop the foreclosures from mounting. Home owners just walked away from their properties, without being able to meet the repayment commitments and thereby avoided bankruptcy.
In the case of Wachovia Corporation, experts point out an accusing finger on the Company that after its acquiring Golden West Financial Corporation, the parent company of World Savings, the troubles started. It was during 2006 the company introduced special programs of home loans to barrowers – “Pick-a-Payment” or “Option ARM”. According to this program, the barrower can choose the minimum payment option for their monthly installments during the initial years and when adjustable interest rates swell, the barrowers will be forced to pay nearly double the payment every month. This was the reason for many home owners to default and eventually forfeit their properties to the foreclosure process. The highest foreclosure filings of California, Florida and Nevada are attributed to this high risk mortgage product of Option ARM.
During the end of 2008 Wachovia merged with Wells Fargo, to create North America’s most extensive financial services Corporation, having 6,650 branches from coast-to-coast and some $1.4 trillion in assets. With this merger the banking service company has become the 4th largest in US, operating in 40 States and reaching customers through Wachovia’s networked branches.
Wachovia’s foreclosure properties arising out of their home loans extended between 2004 to 2006 have become REO properties now – repossessed by the Bank after foreclosure public auction. All of them are kept in a marketable condition by repairs, rehabs and fix-ups and prospective home buyers can search their best suited properties by visiting Wachovia website. The properties can be bought through local Real Estate agents linked to Wachovia Corporation, at prices well below their market value.
Kevin Simpson, has been working on ForeclosureDataOnline.com studying the foreclosures market, helping buyers on the finer points of foreclosure homes for sale. Try to visit ForeclosureDataOnline.com and begin your foreclosures by state search.
Kevin Simpson, GM Sales & Marketing, ForeclosureDataOnline.com
[tags]Financial services company, mortgage lending business, Real Estate, home loans[/tags]
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