B++paper - Wachovia Chooses Wells Fargo Spurns Citi Katie...

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“Wachovia Chooses Wells Fargo, Spurns Citi” Katie Blount, DeSilva Singleton, Foster Best, and Tristan Mosher
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The current banking industry is in trouble as the housing market continues to decline causing more delinquencies and foreclosures on adjustable-rate mortgages than in the past. Adjustable-rate mortgages are mortgages that have an interest rate which changes periodically, and payments due on the mortgage may increase or decrease accordingly Why are ARM loans the issue? You are missing a lot of detail here What are you attempting to say?
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(“FRB: Consumer Handbook…”). These problems are spilling over into the credit market as bank customers, who have these types of mortgages, are not able to make their payments or sell their houses so they are forced to file for foreclosure. Banks are then unable to pay back their collateralized debt obligations, or CDOs. CDOs are financial instrument with two types of mortgages boxed together; good mortgages which are higher standard, lower risk mortgages, and sub-prime mortgages which are of higher risk, have lots of debt, and are of a lower standard quality than good mortgages. These instruments are very illiquid, are backed by assets or mortgages, and cannot be readily bought or sold. This is how companies like Freddie Mac, Fannie Mae, and Lehman Brothers went under.Why are ARM loans the issue? You are missing a lot of detail here What are you attempting to say? The government has been forced to step in, on multiple occasions, to save these drowning institutions through bailouts or forging deals under the guidance of the Federal Deposit Insurance Corporation (FDIC). Wells Fargo is one of the largest commercial banks in the United States. It offers a range of services in consumer and business banking, insurance, venture capital investment, investment management, residential mortgage lending, mutual funds, and online banking (“Wells Fargo History…”). The company managed to avoid many of the problems faced currently by other banks by not carrying a large amount of adjustable-rate mortgages or investing in the products based on sub-prime mortgages (“Wells Fargo & Company”). Wells Fargo’s headquarters is in San Francisco and the company has over three thousand branches located throughout the Western, Southern, and Midwestern United States. Wells Fargo is ranked in the top five largest banks in the US in terms of assets and stock value (“The Top Ten…”).
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Citigroup is, by all means, one of the largest and most influential banks in the United States. It has branches located throughout the United States and Canada, as well as locations in approximately one hundred different countries around the world (“Citi’s History”). New York City is home to Citigroup’s headquarters. Citigroupbank provides services for almost every aspect of banking and financial services. Citigroup has been affected by the credit crisis, because their customers are not paying back their credit
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This note was uploaded on 01/31/2011 for the course BUS 342 taught by Professor Jamessmith during the Spring '10 term at Akademia Ekonomiczna w Poznaniu.

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B++paper - Wachovia Chooses Wells Fargo Spurns Citi Katie...

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