Wachovia has now gotten religion on mortgages, and now, no more negative amortization loans, and now no more fees for those stuck in them.
Wachovia, who has $70 billion of mortgages in pick a pay programs in California, assumes that home prices will fall from Q1 2008 to the end of 2009 about 5%. They also assumed that home prices had dropped 8% off their peak in California.
Last I looked, California is down 30%+ across the board. So how does Wachovia only assume the houses that they have mortgages on will only drop 15%?
Because they own the mortgages!
Now Wachovia came out with new standards today for loans in CA, FL and other areas that have been hard hit in housing. LTV of 60% and a 700+ FICO scores.
So Wachovia won't make a loan unless you put close to half down, but the loans they've already made are money good?
Don't look for Charlotte, North Carolina to be the banking capital of the South!