The parade of senior executives leaving their posts — or being forced to leave — continued Friday, with Wachovia Corp. (WB) annoucing late Thursday that CFO Thomas Wurtz has made plans to exit as soon as the company can locate a replacement. Wachovia said in a press statement that it “will begin an immediate search for a replacement.” On Tuesday, Wachovia reported a second quarter loss of $8.9 billion, or $4.20 per share, and the elimination of 10,750 jobs. The bank also became the latest to exit the wholesale mortgage origination channel. The record loss included $5.6 billion in credit costs, including a $4.2 billion loss provision covering expected future losses in the bank’s substantial mortgage holdings. Earnings were also affected by a $6.1 billion impairment to goodwill, that, oddly enough, was not tied to the bank’s ill-fated $25 billion purchase of option ARM specialist Golden West Financial in 2006. Wachovia’s problematic option ARM portfolio, also known as a Pick-a-Pay mortgage, actually grew between the first and second quarters, reaching $122.2 billion of the bank’s $488.2 billion in total loans; no other U.S. bank has as much exposure to option ARMs in real-dollar terms. The North Carolina-based bank yanked its option ARM program earlier in the year as mounting losses made the product unprofitable. Disclosure: The author held various put option contracts on WB when this story was published; indirect holdings may exist, however, via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.
Wachovia CFO to Step Down
Most Popular Articles
Latest Articles
Better narrows loss in 2023, aims to reach profitability soon
The digital lender changed its operating model and plans to continue investments in its proprietary tech platform
-
Pending home sales pick up in February: NAR
-
11 real estate events & conferences to help you thrive in 2024
-
In quest to grow reverse business, US Mortgage Corporation hires Krajewski
-
NAR wants VA to change rules that prohibit veteran buyers from paying broker commissions
-
Renters gain financial edge over homebuyers in key U.S. markets: Realtor.com