WACHOVIA In 1879, William Lemly opened the Wachovia National Bank in Winston-Salem, North Carolina. It grew to become one of the largest banks in the Southeast. In 2006, Wachovia purchased Golden West Financial for approximately $25.5 billion. The purchase was finalized before Wachovia carefully examined Golden West's mortgage portfolio. Wachovia entered the mortgage lending market through the acquisition of Golden West and became Wachovia Mortgage. Once in the mortgage market, the number of mortgage loans to individuals has increased dramatically. Many of the mortgage loans were packaged with variable interest rates. These adjustable rate mortgages increased the original loan amount, allowing Wachovia to earn additional revenue from increased payments. They also received additional revenue by charging high commissions on their investment services.CONCLUSIONS1. Wachovia should have looked more closely at Golden West Financial's mortgage portfolio before the acquisition.2. Wachovia should have checked the individual's credit history and credit score before offering adjustable interest rate mortgage loans. Wachovia bank executives should not have charged high margins to their investors nor should they have manipulated their financial statements for their investors. IMPULSTIVE PURCHASE In May 2006, Wachovia purchased Golden West Financial, the second largest savings and loan bank, for $24.6 billion. This purchase was an effort for Wachovia to achieve its goal of coast-to-coast banking. At least one senior Wachovia executive and a Federal Reserve analyst questioned the acquisition and believed that regulators should not have allowed it. According to some current and former Wachovia officials, the merger was agreed upon in an opaque... middle of paper......er.html?pagewanted=allSchaefer, S. (2011, April 5). For a dead bank, Wachovia is having a busy week. Forbes, Retrieved from http://www.forbes.com/sites/steveschaefer/2011/04/05/for-a-dead-bank-wachovia-is-having-a-busy-week/Serna, J. (2011 , November 29). A Charlie Brown Christmas Story (Foreclosure). The daily driver. Retrieved December 6, 2011, from http://articles.dailypilot.com/2011-11-29/news/tn-dpt-1130-snoopy-20111129_1_jordan-lives-jordan-claims-loan-modificationShean, T. (2008, 5 October). How Wachovia collapsed. HamptonRoads.com. Retrieved December 6, 2011, from http://hamptonroads.com/2008/10/how-wachovia-came-crashing-downWachovia Tightens Home Mortgage Standards. (2008, April 11). Economic news - Economic newspapers. Retrieved December 6, 2011, from http://www.bizjournals.com/triangle/stories /2008/04/07/daily43.html?page=all