Struggling banking giant Wachovia is on the ropes and on the market, hoping a deal with potential buyers.
If Wachovia fails, it will be the largest area bank to go down the tubes. Some who have dealt with the bank say the collapse is well deserve.
Wachovia is saddled with thousands of foreclosed properties, some from its own questionable lending practices and others from its foolish acquisition of troubled mortgage lender Goldenwest.
Reports The Associated Press:
At least two major banks were reportedly in talks Sunday to buy Wachovia Corp., the latest U.S. bank to be the focus of investor anxiety over mounting losses tied to toxic assets.
The New York Times reported on its Web site that Citigroup Inc. and Wells Fargo & Co. are bidding in a possible emergency takeover of Charlotte, N.C.-based Wachovia.
The Wall Street Journal also listed Spain’s Banco Santander SA as a possible bidder. Both papers cited people familiar with the talks who they did not name.
Wachovia spokeswoman Christy Phillips-Brown declined to comment on the reports, as did Citigroup spokeswoman Christina Pretto. Wells Fargo spokesmen could not be immediately reached for comment.
Wachovia’s shares fell 27 percent in regular-session trading on Friday, and shed another 15 percent in after-hours dealings to end the week at $8.50, as investor worries heightened.
We have friends who had to walk away from their home after Wachovia reneged on a commitment to a bridge loan to help them sell the home after real estate values plummeted in Northern Virginia. Last year, we were bombarded by calls from a high-pressure Wachovia mortgage rep, trying to con us into "leveraging the equity" in our mortgage-free home into a 30-year loan. We finally had to block Wachovia’s number to stop the calls.
Wachovia is counting on the $700 billion taxpayer bailout make make the sale possible, hoping the government will save it from its own stupidity.