Wachovia: investors fear exposure to bad mortgage loans

Wachovia the largest bank of Philadelphia based on local deposits took a nosedive on the financial markets on Wednesday despite AIG being bailed out by the US government. The Dow Jones Industrial Average was down 3 percent, whilst Wachovia shares went down a whopping 18 percent in Wednesday afternoon, that’s down to $9.45 per share.

The concerns of British bank HBOS and the increase in overnight borrowing rates in financial institutions brought the financial markets into another day of dreadful turmoil. Wachovia shares fell 25 percent Monday and gained 7 percent on Tuesday.

Wachovia’s exposure to bad mortgage loans are a major concern to investors, in 2006 Wachovia acquired Golden West Financial Corp. for $25 billion which included many bad mortgage loans.

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