If I were the cruel hateful type I would call all my "friends" at Wachovia and ask them how they feel this morning. After doing business with them for 10+ years and a million dollar + line of credit last year I was no longer worthy. No missed payments, no overdue payments, no outstanding loans at the time. Just all of a sudden one day no more construction loans.
This is exactly what happen when there is a credit squeeze. No one will lend money because they fear that they will not be able to get future funds. So the economy slows grinds to a halt.
You can see why they stopped lending to you in the bolded portion of the news article below.It seems they died the death of a fish that swallows too big a prey. In this case they swallowd two prey. Here's the major reason Wachovia failed.
http://topics.nytimes.com/top/news/business/companies/wachovia_corporation/index.html?inline=nyt-orgStupid is as stupid does.
"The Wachovia Corporation became one of the country's largest financial institutions through a series of aggressive acquisitions. But it became mired in losses related to bad mortgage loans, including many brought it in by Golden West Financial, one of the biggest of Wachovia's acquisitions. On Sept. 29, 2008, the F.D.I.C. announced that it had brokered a deal under which Citigroup purchased Wachovia with help from the government.
Wachovia bought Golden West Financial, one of the last major independent banks on the West Coast, in 2006 in a $26 billion deal. In May 2007, it swallowed up A. G. Edwards in a $6.8 billion deal that made Wachovia Securities the country’s second-largest retail broker after Merrill Lynch.
The purchase of Golden West, which had specialized in so-called pay-option mortgages, proved disastrous. As the housing market soured,
it brought Wachovia mounting losses on loans made to home builders and commercial real estate developers. The purchase for A. G. Edwards, also turned out to be problematic. In June, Wachovia’s board ousted G. Kennedy Thompson, the bank’s longtime chief executive.
The month before the A.G. Edwards deal, an article in The New York Times detailed how Wachovia had provided bank services to fraudulent telemarketers who bilked the elderly of hundreds of millions of dollars. When the company was accused in a lawsuit of allowing such firms to use the bank’s accounts to steal the money, bank executives said they had been unaware of the thefts.
But documents from that lawsuit released in February 2008 showed that Wachovia had long known about allegations of fraud and that the bank, in fact, solicited business from companies it knew had been accused of telemarketing crimes.
Internal Wachovia e-mail, for example, showed that high-ranking employees at the nation’s fourth-largest bank frequently warned colleagues about telemarketing frauds routed through its accounts.The documents also showed that Wachovia was alerted by other banks and federal agencies about ongoing deceptions, but that it continued to provide banking services to multiple companies that helped steal as much as $400 million from unsuspecting victims."
