Wachovia Corp (WB), the fourth-largest bank in the United States, has become the latest mortgage lender to have problems due to subprime writedowns. Wachovia has announced that the mortgage market, and the fact that it had invested in securities that included bad loans, is one of the main reasons for lackluster earnings.
Indeed, Wachovia announced this morning that it plans to raise $7 billion in capital in order to help offset its losses. BBC News reports on the problems facing the mortgage market:
It is the latest in a string of top Wall Street names to suffer hefty losses and write down the value of their mortgage-backed investments, whose worth tumbled after thousands of Americans were unable to repay their mortgages.
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