Wachovia Waives Mortgage Fees

June 30 2008 - Wachovia Corp. is waiving all prepayment fees associated with its “Pick-A-Pay” mortgage program to help customers cope with declining home values and the credit crunch.

The struggling bank is also becoming the latest lender to stop offering loans known industry-wide as option adjustable-rate mortgages. Earlier this month, Washington Mutual Inc., the nation’s largest thrift, said it would end all negative-amortizing loans — borrowings in which monthly payments don’t cover accrued intrest, thus causing the loan’s outstanding balance to increase.

Pick-A-Pay, which has been at the heart of Wachovia’s troubles - let borrowers choose between four monthly payment amounts on fixed- and adjustable-rate loans, including partial-interest payments. Lenders have taken fire from consumer groups and analysts for offering such products, which critics say encourage borrowers to fall behind in repaying their mortgages, leading to more frequent delinquencies and foreclosures.

REAL ESTATE: Wachovia Waives Mortgage Fees
by KATHY SHWIFF | Wall Street Journal