On August 15, the SEC announced that Wachovia had joined Citi, UBS, Morgan Stanley, and JPMorgan in agreeing to buy back auction-rate securities from investors and pay a fine of $50 million.
Despite losses of nearly $9B reported on July 22, Wachovia's share price jumped over 20%. Investors were boosted by the news that Wachovia wrote down $6B in intangible value on its struggling acquisiution, Golden West Financial Corp.
Wachovia announced that it would waive prepayment fees associated with its Pick-A-Pay mortgages. This move is aimed at helping struggling borrowers make their mortgage payments and avoid foreclosure.
Wachovia (WB, news, msgs) became the latest bank to report a decline in profit in the third quarter because of the summer's mortgage- and credit-market mess.
The bank said net income fell to $1.69 billion, or 89 cents per share, down 10% from $1.88 billion, or $1.17 per share, in the same period last year.
The United States Supreme Court Rules in Watters v. Wachovia (2007), that mortgage lenders aren't subject to state regulators but to the federal banking agency of The Office of the Comptroller of Currency. At issue was whether banking institutions must register with individual states in order to offer mortgage loans. The stock price rose 4.11% to $55.73.
Wachovia closes sub-prime lending business amidst warnings of a downturn that later weakens HSBC's earnings potential. The stock price fell .05% to $55.72.
09/30/2006-10/01/2006: Wachovia finished the filing process in acquiring Golden West Financial. The stock price fell 2.92% to $54.66.
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