Wachovia Mortgage, FSB - Wholesale - Agency, FHA/VA, Jumbo, Alt-A
Update - 2008-09-29: Trading was halted this morning as shares in pre-market dropped over 90% on news of a CitiBank bailout/buyout of it's banking operations. Once again the FDIC forces a deal before a collapse. Citi steps in with an all stock 2.2 billion offer. From an article at CNN.com:
"The FDIC noted that Wachovia did not qualify as a failed bank..."
Update - 2008-07-22: Wachovia acknowledged it is "exiting the General Bank wholesale mortgage origination channel" in a press release today. The company's report mentioned "Approximately 1,000 Wachovia mortgage origination personnel are being redeployed in the company's efforts to assist customers to refinance and restructure Pick-a-Pay mortgages." Wachovia booked a second quarter 2008 net loss of $8.86 billion, and announced it would be reducing its quarterly dividend to five cents per share.
"Wachovia plans to reduce its headcount by 6,350 employees, or roughly 5% of its workforce. The bank said it has already reduced its mortgage employee headcount by 2,000 through June, and plans to cut 4,400 employees in its mortgage segment over the next year..."
In a memo to employees dated today (view pdf), CEO and President Robert K. Steel notes the 6K+ positions being eliminated are "active", and the 4K+ are "open". "Realigning Wachovia's mortgage business," he called it, intoning more changes would come "in the weeks ahead."
Update - 2008-07-21 (5 pm PDT): No press release as yet, but plenty more information has been flowing in.
The shutdown may not affect the independent subsidiary Vertice based on information we have coming in, but most employees have now received notification of the closure of Wachovia's wholesale. Applications will be accepted through Friday 2008-07-25. An official notice sent to brokers can be viewed here (pdf).
"This decision will be effective July 25, 2008, at 5:00 pm local time which will be the last date on which Wachovia Mortgage will accept new loan registrations from brokers. Additionally, no new locks will be accepted after 8:00 pm EDT, July 25, 2008. Existing rate locks will be honored. If the loan does not close and fund by the lock expiration date, no extensions will be granted. All loans must be received by your Wachovia Servicenter no later than 5:00 pm local time August 25, 2008 and must close no later than end of business September 30, 2008."
We also have this, from an internal notice, emailed to employees this afternoon by David Pope, Head of Mortgage and Retail Credit Employees:
"Based on our decision to focus on building relationship banking customers, we have decided to discontinue doing business through our Wholesale channel after July 25. This will be the final day to accept applications."
No specifics were given in the memo with regard to layoffs, other than a general statement that "there will be displacements throughout the organization as a result..."
Original Posting - 2008-07-21 - 8:30am PDT: We are hearing about the shutdown of wholesale mortgage operations at Wachovia, with a Press Release due out at 1:00pm EDT. This morning, we received the following:
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:
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."
More info will be posted as it becomes available.
wasanichelender at 19:21 2008-07-21 said:I love bold predictions...although there must have been some reason for the purchase, as it didn't make sense then, and makes even less sense now. Permalink
Wally's World at 15:10 2008-07-22 said:At least the executive management let their valued employees know they were going to be terminated. ComUnity Lending hosted several (extremely rare) conference calls with the sales force and staff to explain precisely how and why we were going to "make the turn" last August. On Friday, before the close of the month, the EVP of Sales chided his sales reps for not signing up NEW ACCOUNTS...."because the shops you're in today may not be there come Monday!" ComUnity wasn't there that Monday. In the most child-like of business decisions I've ever witnessed...they decided to HIDE from their employees! Yes! You can't make this up! They decided the best course of action for closing the company was to HIDE! The didn't answer phones and quietly cut every employee's e-mail account! Brokers were calling! Borrowers were calling! Title and closing companies were calling! They hid...no lie....just hid from the world. The Account Execs got word via snail mail several days later from a third party payroll company stating ComUnity hadn't deposited the funds for payroll and had breached the contract. That didn't even have the stones to send any of the members of their "family" (I hate when corporations use that trite term) a letter! Permalink
Note: Comments may take a few minutes to show up on this page. If you go to the forum thread, however, you can see them immediately.
Important: This company is on our list of lending operations that have "imploded". However, please note that "imploded" is a somewhat subjective and does not necessarily mean operations are ceased permanently: it can mean bankruptcy filing, temporary but open-ended halting of major operations, or "firesale" acquisition. All information here is provisional, and may contain inaccuracies (especially newer information). If you are planning on doing business with this company or any other one listed on this site, you should inquire with them directly on whether they can still meet your needs. Many are still operating in some capacity.