There are two important financial headlines this evening and the futures are solidly red. Let's take a look at news regarding Wachovia and Bank of America starting with the former.



Wachovia Halts Wholesale Mortgages



Wachovia mortgage unit halting loans via brokers.



Wachovia Corp (WB), the fourth-largest U.S. bank, on Monday said its main mortgage unit will stop offering home loans through brokers this week, joining a growing number of lenders to curb wholesale lending.



"We thought it was important to focus on customers who have relationships with the bank, and in geographies where Wachovia has branches," spokesman Don Vecchiarello said. "Based on that, we've decided to discontinue doing business through our wholesale mortgage channel as of July 25."



Wachovia is assessing how many jobs will be affected by the decision, Vecchiarello said.

Bank of America Corp., the biggest U.S. consumer bank and home lender, said second-quarter profit fell less than analysts estimated and predicted the purchase of Countrywide Financial Corp. will add to earnings this year.



The bank said Countrywide will add to profit this year, and that cost savings will be "significantly" more than the $670 million projected in January.

Bank of America Will Not Guarantee Countrywide Debt

Bank of America Corp., the second- biggest U.S. bank, said it may not guarantee $38.1 billion of Countrywide Financial Corp.'s debt after taking over the mortgage lender, increasing the likelihood of a default.



"There is no assurance that any such debt would be redeemed, assumed or guaranteed," the bank said in an April 30 regulatory filing, adding that no decision has been reached. Investors had grown more optimistic the bank would back Countrywide debt. Ratings firm Standard & Poor's cut the mortgage-lender's debt to junk today after saying it would raise the grade earlier this week.



The $4 billion purchase of Countrywide is scheduled to close in the third quarter. Investors have speculated Bank of America may seek a lower price or cancel the deal because U.S. home prices and sales have deteriorated.



"This confirms how tenuous this transaction is," said Christopher Whalen, managing director at Institutional Risk Analytics, a banking research firm in Torrance, California.

Fraudulent Conveyance

To Scroll Thru My Recent Post List