by Associated Press
Published: Mon, September 29, 2008 - 6:49 am CST
Last Updated: Mon, September 29, 2008 - 6:54 am CST
NEW YORK (AP) - The government says Citigroup will acquire thebanking operations of Wachovia in a deal facilitated by the Federal
Deposit Insurance Corp.
The FDIC says Wachovia didn't fail, and that all depositors are
protected and there will be no cost to the Deposit Insurance Fund.
The sale of Wachovia Corp. comes just days after the
government's seizure of Seattle-based Washington Mutual Inc. - the
largest bank failure in U.S. history.
Wachovia has been among the banks hardest hit by the ongoing
crisis in the mortgage market. Its current problems stem largely
from its acquisition of mortgage lender Golden West Financial Corp.
in 2006 for roughly $25 billion at the height of the nation's
housing boom. With that purchase, Wachovia inherited a
deteriorating $122 billion portfolio of Pick-A-Payment loans,
Golden West's specialty, which let borrowers skip some payments.
(Copyright 2008 by The Associated Press. All Rights Reserved.)
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