"In a reversal, Wachovia Corp. said Monday it would stop making option adjustable-rate mortgages, which were why the bank bought Golden West Financial Corp. but is now stuck with more than $120 billion of the rapidly souring loans. ... The changes effectively mean the dismantling of the core product of Golden West, the Oakland, Calif., thrift Wachovia bought for $25 billion two years ago. ... For years , the 'Pick-a-Payment' option ARM was the core offering of Golden West's World Savings unit. But the company saw its market share slip as competitiors such as Countrywide Financial Corp. and Washington Mutual Inc. aggessively marketed these loans to a large variety of borrowers.. ... Now than 18% of the option ARMS originated in 2005 and 2006 are already at least 60 days past due, says Barclays Capital, which looked at loans that were packaged into securities", WSJ, 1 July 2008.
I remember thinking when Wachovia bought Golden West, "what fools. Buying from the Sandlers. If the Sandlers are selling, why are you buying?"
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