Wachovia Ceasing Wholesale - Drawing In Tenticles

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Wachovia has decided they only want to do mortgage business with people who have an existing banking relationship with them.

Starting to smell a bit like IndyMac in here?

The announcement wasn't really a surprise since it has been hinted at several times over the last few weeks. It's just always nice to get a really personal, ahem, email that your Account Executive is now looking for a job just like the rest of us.

And I cut and paste ...

"As you know, the mortgage industry is experiencing a very challenging market environment. Declining housing values, increased foreclosures, disappearing mortgage lenders, and a struggling secondary market are all symptoms of this market turmoil. Wachovia Mortgage has evaluated its business model and decided to reposition its mortgage business. Going forward, we will primarily focus on customers who have relationships with the bank, and who are located in geographies where Wachovia branches are located."

I've been called a "stoned monkey", an "idiot", a "marble brain" and a few other words on a couple of other blogs because I've been predicting this for MONTHS (not just Wachovia but bank withdrawal and collapse). I haven't published too much of it here on AR because I've always tried to keep it positive.

Well, the public is still sitting on their ...

See you at the polls in November. I dare you to vote for inexperience in a time like this.

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THE OPINIONS IN THIS COMMENTARY ARE STRICTLY KEN COOK's PERSONAL OPINION AND NOT REFLECTIVE ON ACTIVE RAIN, NOVATION MORTGAGE, or ANY SPONSOR OF THIS WEBSITE.

EDUCATION BEATS LEGISLATION EVERY TIME. Get your clients, friends and family members to a LENDER RUN home mortgage seminar as soon as possible.

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Copyright©2008 Ken Cook. Georgia and Florida real estate investment loans, FHASecure and FHA Home Loans, nationwide commercial hard money and small business loans, non-recourse loans for real estate investors

Novation Mortgage, 2501 E Piedmont Road, Suite 201, Marietta, GA 30062 Georgia Residential Mortgage Licensee 20014. Florida Mortgage Broker Business MBB 0703760 FHA Lender - Equal Housing Lender

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I started writing on Active Rain in 2006 when I was representing the mortgage industry. I am no longer in that industry and many of the older posts contain outdated information. Please do not contact me for LENDING or MORTGAGE questions but rather contact a licensed mortgage professional from your area. I have always been in marketing and branding and that is still what I do. Thanks for reading!

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Ambassador
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

I've dealt with several mortgage companies over the years that required borrowers to open a savings or checking account with that bank. 

I haven't see it for several years.  I suppose I'll be seeing it again. 

The Bank of America physicians loan is the classic.  They get a good loan at a good rate, little down.  All they have to do is open a $100K account.  Can't recall the details.  But, the refused to give one of my physician borrowers a lock in when rates were rising.  We moved the loan 

Sometimes the banks just push and push and push.

Jul 21, 2008 05:13 PM #1
Ambassador
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Eleanor Thorne
Steve Thorne NC Mortgage Experts - Cary, NC
Cary Mortgage Loans 919-649-5057

WOW!  I guess the World Mortgage thing did hit them hard - we figured Countrywide/ B of A would be first.

Jul 21, 2008 05:15 PM #2
Rainmaker
385,611
John Walters
Frank Rubi Real Estate - Slidell, LA
Licensed in Louisiana

Sounds like they are really hurting.  Predictions are more regional banks etc will fail.

Jul 21, 2008 05:40 PM #3
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Sharon Paxson
HÔM Sotheby's International Realty, BRE License 01501912 - Newport Beach, CA
Newport Beach Real Estate - HOM Sotheby's Int'l Re

I had heard this one may be next . . .

Jul 21, 2008 06:20 PM #4
Rainmaker
217,670
Joan Mirantz
Homequest Real Estate - Concord, NH
Realtor, GRI, CBR, SRES - Concord New Hampshire

And the candidate experienced in Banking and Finance would be.....?

It goes a lot deeper than that Ken

Jul 21, 2008 08:51 PM #5
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1,274,122
Debe Maxwell
www.AtHomesCharlotte.com | Savvy + Company Real Estate - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Ken:  First of all, in answer to Joan's question above--Romney but, WHAT on earth were we thinking?!  As for Wachovia--I've been dealing with BofA for years and they've always given my clients better rates if they open an account with them.  A couple have even moved their money to BofA until their loan closed, then moved it back!  (Many can play THIS game!!)

Debe in Charlotte

Jul 21, 2008 09:28 PM #6
Ambassador
884,111
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

I am wondering if this is going to end up being bigger that anyone thought, or blown out of proportion... and I think it depends a lot on who gets elected (especially to Congress...) in November. 

Jul 22, 2008 07:37 AM #7
Rainer
27,074
Ron Avneri
Seattle, WA
Financial Professional

It wasn't the World Mortgage thing that hurt them, World was very profitable.

Look into their recent lawsuits and bad press and you'll find your answer.

Jul 22, 2008 09:58 AM #8
Rainer
207,933
James Wexler
wexzilla.com - Scottsdale, AZ

With what is happening in the industry you can't blame Wachovia from taking this step.  If they haven't already, I would expect the rest to follow.

By the way, do you have an outside blog that you use?

Jul 28, 2008 11:49 AM #9
Rainmaker
271,550
Ken Cook
Digital Content Creator - Marietta, GA
Writer For Hire

James I sometimes post to http://blogx3.com, also known as "The 24", and you and others here can, too. It's pretty high up on Google for most of the search terms on there.

I don't "blame" Wachovia for doing this but the reason they are doing it is because they, like most other lenders, participated in the feeding frenzy and by pulling back so far prohibit GOOD QUALIFIED BORROWERS full access to loan products that could help stem the blood loss. Before they withdrew back into their shell we sold a few very qualified loans to them. The problem, James, is even well qualified borrowers are being denied because of the extreme fear in the industry. We know what we're doing - have decades of experience in the industry - and deal mostly with borrowers with good credit, income and assets. Over 2/3rds of our good clean files have been denied by lenders this year. That's over 90 homes that did not sell to well qualified borrowers who should, by all guidelines, be in those homes.

Last month a principal with a major wholesale lender told me they had 900 files in processing. Pre "bubble" 700 of them would have closed. He confided in me that because of a completely paralyzed market only 250 to 300 of those files would close. That's a problem and one of the reasons this "crash" is lasting so long. It's OVER CORRECTION (which many of us predicted when this whole thing started) and KNEE JERK. But then I'm in one of the most knee-jerking industries of all.

Jul 28, 2008 08:31 PM #10
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