Wachovia Bank is reported to be near collapse after analysts said their portfolio of Adjustable Rate Mortgages (ARM's) is in huge trouble. Seventy three percent (73%) of Wachovia mortgages are ARM's!
According to the financial analysis firm Fitch Ratings, Inc., up to 45% of Wachovia ARM's may default when the adjustable mortgage interest rate resets at the end of September, just one day from now.
For the average option ARM borrower, payments will rise 63 percent, or by an additional $1,053 per month, when their rates reset, according to a Sept. 2 report by New York-based Fitch.
It is widely expected that homeowners facing that amount of increased mortgage payment every month will simply stop paying or walk away leaving the bank with zilch.
If I had any accounts at Wachovia (I do not) I would most definitely close them as soon as I could to make sure I got my money. Those of you with accounts at Wachovia are urged to do what you think is right to protect yourselves.