In a press release issued today, Wachovia acknowledged that it is “exiting the General Bank wholesale mortgage origination channel” and will no longer offer mortgages through brokers.

The bank recently disclosed that it lost $8.86 billion in the second quarter of 2008 and announced that its quarterly dividend would be slashed to five cents a share.

A reported 10,750 jobs will be cut by the North Carolina-based lender.

Beginning July 25th, Wachovia will no longer offer mortgages through independent mortgage brokers and instead will rely only upon in-house retail loan officers. Vertice, Wachovia’s third-party origination unit is apparently unaffected by the move.

Wachovia becomes the latest in a series of lenders to exit the wholesale mortgage lending business. Bank of America got out of the business several months ago, and to-date, over 250 mortgage lenders, wholesale and retail alike, have gone out of business, declared bankruptcy, or simply ceased lending activities in the past year and a half.

To real estate investors, that another lender is getting out of the mortgage business should not come as any surprise. But it does stress the need for the investor in residential real estate to be creative and to find solutions that fit the problems the industry is having. As potential buyers find that mortgages are increasingly hard to come by, it is the investor who can offer alternatives who is best poised to succeed. Be it through owner financing, wrap mortgages, or leasing, it is the investor who can recognize the problem and turn it to his advantage who will come out ahead.

We’d love to be your closing attorneys in Atlanta. Want to know more? Contact us and we’ll be happy to discuss how Harlan and Associates can be of service to you!

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