Wachovia Mortgage Eliminates Pick-A-Payment Mortgage Loan

David Pope, president of Wachovia Mortgage said "Proactively waiving prepayment fees for our Pick-A-Payment mortgage products gives our customers the freedom to manage their current financial situation more effectively."

Wachovia became a major player in negative amortized mortgage loans, “Pick-A-Payment” mortgages, when it acquired Golden West in May 2006. Golden West specialized in “Pick-A-Payment” mortgages which allows its consumers to choose making a 30 year amortized mortgage payment, a 15 year amortized mortgage payment, an interest only mortgage payment or a less than interest only mortgage payment in which unpaid interest is tacked onto the total mortgage loan balance.

A majority of Golden West’s “Pick-A-Payment” mortgage portfolio was concentrated in California due to the rapid growth of equity in real estate. The purchase of Golden West not only cost Wachovia Chief Executive Ken Thompson his job but it also has Wachovia bracing itself for further mortgage related trouble.

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