Wachovia, one of the largest banks in the United States announced today that they expect more of their “pick a pay” or bad credit mortgages to go into default. The company has been hit hard by the housing crisis and numerous customers are choosing to go into default rather than refinance or find a different loan. According to the company, their worst bad credit mortgage problems are in California and Florida.”It’s hard to quantify, though, from the standpoint of how many of our defaults are just ‘walk-away’ and the reason is, people, they don’t tell you,” Chief Risk Officer Don Truslow said on a conference call.What does this mean for homeowners who are still seeking bad credit mortgages?”Loans are still available,” said Lynn Reaser, a senior economist at Bank of America Corp’s wealth and investment management unit, in an interview. “Homebuyers should expect to see standards as they might have expected four or five years ago.”"The performance of option ARMs has been catastrophic in the industry,” said David Olson, co-founder and president of Wholesale Access in Columbia, Maryland. “Wachovia is doing better than its peers, but delinquencies are going up.”
Related reading: Bad Credit Mortgages
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