Wachovia COSI
Updates to the Wachovia Cost of Savings Index (COSI) (formerly known as the World Savings COSI) are no longer being provided to the public by Wachovia. Wachovia loan representatives don’t even have the COSI numbers, because they are no longer originating COSI loans. Wachovia will provide its COSI loan customers the current rate on their monthly statements. This may only be relevant to borrowers who have World Savings/Wachovia adjustable mortgage loans using the COSI as an index; but there are a lot of these loans out there.
Wachovia will soon be acquired by Wells Fargo Bank. We anticipate they would try to get rid of this index altogether and come up with a substitute index. This has precedence and is usually allowed in the terms of the loan documents. The index was changed when Wachovia acquired Golden West. Also, when Fannie Mae stopped publishing LIBOR rates, many loans that were tied to the Fannie Mae LIBOR were changed to a different LIBOR rate index.
Since we won’t have a source for the data, we will no longer be able to consistently publish the COSI rate. We suggest current customers use the comments section of this post to keep each other updated as to the current rate. The rate for the previous month is usually calculated by the 15th of the current month.
Tags: COSI, Interest Rates, Mortgages
Greg – I own a single family.
Paul
Paul,
Thank you for posting and congratulations on escaping COSI. Are a single-family loan or a multi-family?
Good luck to all,
Greg
Whats misleading is Wachovia’s old publication of the CODI. It is presently at 1.893 and they show it at 2.73 (from February of this year).
I dont think they want to make the difference between the COSI and CODI so obvious. I was fortunate enough to chose the CODI when Wachovia asked me.
They also lowered my 0.5% to make up the difference in time. My overall rate right now is 4.15%, and I’ve been tracking my decision since Nov 07.
I’m glad I switched!
CODI CODI ch COSI Cosi ch Margin True Rate Potential Rate
November 1, 2007 5.323 -0.020 4.9 0.110 2.257 7.580 7.7
December 1, 2007 5.293 -0.050 4.85 0.060 2.257 7.550 7.65
January 1, 2008 5.268 -0.075 4.79 0.000 2.257 7.525 7.59
February 1, 2008 5.145 -0.198 4.74 -0.050 2.257 7.402 7.54
March 1, 2008 4.958 -0.385 4.65 -0.140 2.257 7.215 7.45
April 1, 2008 4.748 -0.595 4.43 -0.360 2.257 7.005 7.23
May 1, 2008 4.543 -0.800 4.19 -0.600 2.257 6.800 6.99
June 1, 2008 4.323 -1.020 3.91 -0.880 2.257 6.580 6.71
July 1, 2008 4.108 -1.235 3.74 -1.050 2.257 6.365 6.54
August 1, 2008 3.898 -1.445 3.77 -1.020 2.257 6.155 6.57
September 1, 2008 3.673 -1.670 3.73 -1.060 2.257 5.930 6.53
October 1, 2008 3.517 -1.826 3.74 -1.050 2.257 5.774 6.54
November 1, 2008 3.453 -1.890 3.76 -1.030 2.257 5.710 6.56
December 1, 2008 3.236 -2.107 3.78 -1.010 2.257 5.493 6.58
January 1, 2009 2.965 -2.378 3.76 -1.030 2.257 5.222 6.56
February 1, 2009 2.73 -2.613 3.69 -1.100 2.257 4.987 6.49
March 1, 2009 2.572 -2.771 3.6 -1.190 2.257 4.829 6.4
April 1, 2009 2.428 -2.915 3.6 -1.190 2.257 4.685 6.4
May 1, 2009 2.265 -3.078 3.55 -1.240 2.257 4.522 6.35
June 1, 2009 2.091 -3.252 3.51 -1.280 2.257 4.348 6.31
July 1, 2009 1.893 -3.450 3.43 -1.360 2.257 4.150 6.23
Called Wachovia yesterday, the COSI dropped from 3.51% to 3.43% on July 15th.
Slowly moving in the right direction.
Good luck to all.
Greg
Thanks Deirdre.
It appears that Wachovia is publishing the current rate on their site again. I found it at the following link:
https://www.wachovia.com/foundation/v/index.jsp?vgnextoid=8ca9c89da11aa110VgnVCM1000004b0d1872RCRD&vgnextnoice=1
CLASS action suit pleeeeease count me in!!!!!!
These people @ Wachovia make me sick! They told me if I want out of my cosi I have to pay 4,0000 in closing cost.
I wish our pres. Read what were going through… Like he cares?
I’m a single mom who’s hrs. Were cut and I need to be put in a fixed %. Because I’ve never defaulted
They said they can’t modifiy me
Staten Island, NY
I’ve received a few email messages after making this post. This should answer most of your questions.
My loan was current.
As I mentioned before, I received a call from Wachoiva in responce to several of the letters I sent. There isn’t a specific number to call, they will contact you.
Fax letters and address them to the “office of the president”. Here’s the number: 210-509-1167.
This didn’t happen overnight–I spent 13 months dealing with the bank.
Read the HAMP program guidelines (even though lenders are not required to participate) increased monthly mortgage payments can be considered a financial hardship.
Because of Neg-Am payments my principle balance was approaching 110% and my monthly payments were going to increase.
Dear Sick of Wachovia,
You give us all hope! If you don’t mind, were you behind in payments or not? The VIP rep told me that only those who were behind could apply for modifications until July. I’d love to fax my complaint to the President, but cannot find the Fax # for the Pres. on this thread (only for the VIP reps). Would you post it?
Thanks
Thanks guys, I actually received the modification offer about 2 weeks ago. I didn’t want to get ahead of myself and post this info until I saw it reflected on my current statement–it has been recorded and is a done deal. I called the VIP department and faxed the office of the president several times a week for the last 13 months (all the numbers posted here). I finally received a call back from someone in reference to one of the letters faxed to the “office of the president”. Here was my argument: My loan was originally a World COSI loan and had been converted to the Wac. COSI. At the time of the merger we should have received a letter to opt out of the new COSI and go with the CODI. I never received this letter–if I had, I would have asked to be converted to the CODI (proven, stable index and would have lowered my margin). I asked that they “go back” and retroactively convert the loan. The agent told me that this wasn’t possible but informed me that by years end Wells wants all Wachovia pick-a-payment loans modified–especially for customers that made neg-am payments. He offered to “flag” my loan for a modification.
About a week later I received a call from the modification department, they informed me that my loan was pending approval for a mod. Went thru the steps, phone interview and faxed financial info. 2 weeks later I received a modification offer, I felt like I won the lottery!
No fees and no prepayment penalty! Offer is valid for 7 days and you must send the first payment in with the agreement. I signed and overnighted the papers!
I now have a 40 year mortgage. Starting rate 4.39% — .25 point increases annually for the first 6 years and final rate of 6.39% Years 1-6 interest only or P&I — starting year 7 P&I only. I also received a 10% principal reduction!
Keep in mind my loan is a jumbo and I had been making neg-am or interest only payments for almost 5 years. The principal reduction pretty much wiped out all the deferred interest on my loan.
Congratulations, Sick!! What did they modify you into? Fixed rate (at what interest rate)? Straight COSI variable without the pick-a-payment? Some other index variable?
Hey Sick – what did you do? how did you get the modification? how much did it cost? do you have a contact number at Wachovia who won’t deny all knowledge such modification exist?
Despite my name and previous posts I believe Wachoiva is aggressivly moving toward doing away with the option arm “pick a payment” COSI loans.
After 13 months of discussions (more like arguing with Wachovia) I finally recieved a phone call and modification offer. It has been signed, returned and recorded based on my last statement. They required a phone interview, 2008 Federal Tax Return and a current P&L statement (I’m self employed).
More to come.
I was told by Wachovia VIP dept the the COSI reset at 3.51.
Here is the fax number they gave me 2105091167 good luck to all.
Brent,
Welcome to Wacovia COSI blog — I wish we had some words of encouragement for you, but it will be frustrating for awhile until WFB sorts this out. We are all trying to get some visibility on what WFB is going to do with the COSI index, which is now much higher than indices considered to be comparable.
I would encourage you to post the fax number here, and then I encourage all of us to fax repeatedly, daily if necessary until WFB realizes that some action is needed.
Thanks, and good luck to all.
Greg
I am new to the discussion but have a former World Savings COSI loan and just got off the phone with the VIP department and was
told that not only are they no longer offerign any modifications on these loans. My problem with this is I was told by my original loan
rep that at any point during my loan I could swtich my loan to a fixed program for a $300 fee. As Early as last year Wachovia solicited
me for the same program and now they act as if that was never part of my original loan. Any advice on how to proceed? They gave me
a fax number to send a complaint
We are closing with them today on a 30 yr fixed rate at 4.62% with zero closing costs. I don’t trust them enough to continue with our COFI loan. It has been 5 months of dealing with incompetent, ignorant, temporary employees at Wachovia to try and close this loan. I have NEVER seen anything like this in my life! They are wrapping up this temporary program to get rid of the pick a payment loans. My suggestion is to jump on this loan if it is still available. I figure I’ll do a little prepaying to make up for the fact we will no longer be amortizing 2x/mo. I just can’t deal with these people anymore. They can’t mess with my index after today!
Good luck to all all stick with the COFI/COSI/CODI loans!
How is Wachovia able to get away with this? What will it take to have the Federal Reserve, FTC or any other authorized government agency to start an audit process on their numbers? I beleive a more realistic rate on this index would be beteen 2.25-2.75 points.
I had an updated statement posted for my account.
Deirdre,
Where on the Wachovia website is the new rate?
I sent an email to Wachovia yesterday and received a reply that the rate for 5/14 is 3.55%. SLOWLY moving in the right direction.
Also, as of this morning, the website appears to be updated with the new rate.
So it’s May 18th and the rate was supposed to change on May 15th but as I check the online my the rate as of 5/16 has not changed since last money and is the same as the last 3 months – 3.6%
Now I’m not a statistician but an index staying the same for 3 straight months in this market…. WHAT A CROCK!
Good work Dave-Notice how the COSI is in line with the other indexes in a high interest environment,but a disparity develops and grows larger when rates fall. I spoke with a VIP rep a few days ago and flat out asked how the rate was calculated (knowing full well how it is SUPPOSED to be calculated) I got some double talk that did not even resemble what they are supposed to be doing. This was the third different answer I have gotten to this question.It is clear that Wachovia tries not to keep its reps armed with CORRECT information. It is also clear that when you have five percent CDs expiring and being replaced with one to two percent CDs the COSI rate should drop significantly. It’s also very improbable that the rate would stay exactly the same for two months in a row. unfortunately Wachovia continues to do what they want . Some legal action is definately in order. Does anyone know of any legal action pending?
Useful illustration of what a total crock the Wachovia COSI really is:
http://spreadsheets.google.com/ccc?key=pQs8GCUhB6sz4drSeqIigYg&hl=en
During one of my calls to Wachovia an account rep. made an interesting comment which caught my attention.
I have *NO* way of confirming her statement but maybe someone here can help.
She stated that new CD accounts opened at Wachovia are considered Wells Fargo deposits.
If this statement is true, this means that current market conditions no longer drive the COSI. The account “pool” is closed and the COSI will only adjust when legacy CD accounts expire.
If anyone would like to help in investigating this information please email me: sickofwachovia@gmail.com
All,
One clarifying comment from my following post — the deposit balances shown are in millions, so Savings and Now Accounts of $79,077 (at September 30, 2008) represents $79.1 billion.
Thanks!
The rep at Wachovia said their COSI was based on “a selected group of CD’s”. World Savings’s COSI was based on an average interest rate paid to all depositors, Wachovia should be expected to honor the terms of the original loan agreements, when they purchased the World Savings loans. It seems to me that a class-action suit would succeed in recovering some interest paid from beginning of 2008, but I am not an attorney. I thought about a formal complaint to FRB but I can’t see their chastising a bank which they are actively helping to rip off the public.
All,
I have additional (unconfirmed) thoughts on the COSI.
I took the securities filings published by Wachovia in their 10-Q and 10-K and found (on page 111 of the September 2008 10-Q, for example) information which detail their ending deposits balance, and the related interest rate for each classification. The following categories are listed, and are available going back to Q1 2004, which is as far back as I went (sorry if formatting is skewed):
Category Sept 2008 Int Rate
Savings and Now Accounts $ 79,077 0.63%
Money Market Accounts $127,097 1.41%
Other Consumer Time $128,595 3.67%
Foreign $ 24,654 3.06%
Other Time $ 30,029 3.40%
Total interest-bearing deposits $389,452 2.25%
Federal Funds purchased and sold $ 39,429 2.47%
Commercial Paper $ 4,421 1.46%
Securities Sold Short $ 6,068 3.56%
Other Short-Term Borrowings $ 8,280 1.68%
Long-Term Debt $183,384 3.94%
Total $631,034 2.76%
I entered this same information into a simple spreadsheet, for every quarter going back to Q1 20004 and then attempted to recomputed the published Wachovia COSI — and was never able to exactly recompute it.
However, I was able to come very close (within 4-15 bps for all quarters tested) by excluding from “Greg-COSI” the following: Savings and Now Accounts, Money Market Accounts, and Federal Funds purchased and sold. I believe that difference could be due to the use of average balances to determine the Wachovia-COSI, versus my use of the month-end balance above, but I also suspect there is some other variable here that I don’t understand as the swing is too great for it to be just average balances.
I was also able to approximately recompute the old GDW Financial COSI by using only Savings and Now Accounts, Other Consumer Time, Other Time, and Long-Term Debt. What a great index!!
Two things appeared to me, and suggest a conclusion. One, as we’ve previously discussed, the exclusion of Savings and Now Accounts has a major impact on the index, and have such a large, low-cost pool of deposits excluded from the basket of securities brings a higher base index that anyone accustomed to GDW would have expected.
Two, and more interesting (and concerning), was Wachovia’s heavy reliance on Long-Term Debt to fund its balance sheet from 2004 to 2008. At the beginning of 2004, Wachovia had Long-Term Debt of $38 billion. By the third quarter of 2008, that number had grown to $184 billion, and was driving the growth in the balance sheet at Wachovia. This is very expensive money for a bank (as high as 5.44%) and due to its long-term nature, isn’t going to go away soon and thus, will remain a major component of the Wachovia-COSI index calculation.
I’ve not yet found a good maturities schedule for this long-term debt as we will all be happier when this debt instruments have matured out of the index, and I will publish as soon as I have one. The nature of the long-term debt is unusual as well – sometimes notes payable to foreign governments or agencies (??).
However, the existence of such a large, expensive and long-term bank liability has caused me to revisit my belief that COSI will continue to drop with the general declining interest rate environment. The substantial component of Long-Term Debt will continue to slow the decline of the index, which we have already been seeing. The only positive (such as it is) is that Wells Fargo is not likely to tolerate such expensive money on a permanent, go-forward basis, and if you have a long-term view of the loan, then once this debt is digested, the index should more approximate a true cost of funds for Wells Fargo.
I’ll provide more information as I find it. Stating the obvious, my analysis could be (badly) flawed and I welcome other view points. My opinion is just that, and please don’t rely on it if you are making an investment or financial decision – however I am happy to help! Please let me know if you’d like a copy of the spreadsheet, my email is gregtibbitts@aol.com, please title the email Wachovia COSI. And I’m not affiliated in any way to Wachovia or Wells Fargo, except that we owe them money.
Good luck to all,
Greg
Website link to September 2008 Wachovia 10-Q:
https://www.wachovia.com/foundation/v/index.jsp?vgnextoid=cd2e5ef43a0aa110VgnVCM1000004b0d1872RCRD&vgnextfmt=default
Just to ensure that the proper comparisons are made, the 11th District COFI was 2.003% for February. This is the latest reported rate and will be effective through April until the March rate is reported at the end of this month.
See:
http://www.moneycafe.com/library/cofi.htm
That was moderate
I am selling my home paying off my COSI mortgate with them and would never consider Wachovia for a mortage. Don’t you think they are obligated to create an index that is close to the old COSI calculation for existing former World Savings COSI mortgage holders? Their VIP reps don’t think so. I was told that they could substitute any index they want to. I’ll bet some State AG’s might disagree with them on that, might be worth a call. Is there a class action here? Note that the 11th District COSI for member institutions of the Federal Home Loan Bank of San Francisco was a rate of 2.003% for April 2009 (source is Lending Tree site).
Spoke to the VIP department he confirmed the rate has not changed and is still 3.6%. He stated there were only regular refinance deals available nothing special for COSI loan holders. He stated that the index was made up solely of corporate owned CDs no individuals people at all; which is a new twist for me. But he did say that that concurred with the wording of the COSI definition as ‘individuals’ could also be corporations. He said I could fax the research department on 2105091174 requesting details of what CDs made which I did last month. I will fax again. This company is a fraud.
All,
More frustrating news in COSI land — I talked to the reps today, who indicated that COSI is still at 3.60%, and that it didn’t come down at all from last month.
Perhaps this is why WFB has record earnings for Q1?
Good luck to all….
Greg
Hi Mark
I’ve gotten quite the run around myself. I’m told they are working on over 15,000 refi apps right now and are very understaffed. I am in underwriting for the 2nd time due to THEIR mistakes and they will not let you lock in your rate. I’m going to raise hell if my rate goes up because of them dragging their feet. Anyway, you can start with the main # 866-489-7491. There is a mortage consultant named Robert (866-644-8991 x761274) who is not particulary helpful-he never gets back to you. Once you do get past him, you are assigned a mortagage processor. I would start with the main # and see where you get. They are (were) offering a ZERO cost conversion to a conventional mortgage. No fees rolled into loan, they are paying all fees. They have assured me time and time again I will not be suprised at the closing table- we will see.
Good luck and let me know how it goes.
Pat ….Do you have a name and number of a rep? they just told me “sure we will refi you into a fixed rate and you will only have to give us $5900 in fees” It seems that no two people at Wachovia have the sme info ..Any help would be appreciated
well i guess i better join the COSI club..for bad or for good…of course i am a former world savings customer and waiting for wachovia to do the right thing for us Cosi holders. of course they want to get them of their books asap but i guess they are swamped…but i do have a number for the wachovia modification program…..1- 800- 282 – 3451..they do update it.. it does mention that wachovia will contact those that will be able to qualify for a modification to their mortgage…..hope this helps and thanks to all the others who have helped by posted it is much appreciated………
Greg-thanks for your input.
FYI- any pick-a-payment Wachovia customer( former World Savings customers), are elgible for this refi deal (zero fees). At least this is what Wachovia tells me. I’ll let you know if they are true to their word when I get to the closing table in a few weeks.
Pat, I don’t know your circumstances, and so please take this with a grain of salt.
If you are able to refi at 4.62% fixed, that is a phenomenal rate by any historical standard, and it’s hard for me to envision a likely scenario where this doesn’t beat a COSI-based loan day in and out. I hope you take it, and then stop by money.cafe every once in a while to see how we COSI borrowers are doing.
Good luck to all,
Greg
I have also gotten conflicting info regarding the new index. I don’t trust Wachovia at all. We’ve banked with them for years and I have friends that work for them. They are a sneaky organization and don’t treat employees well. We are almost 6 years into the COSI loan and trying to decide if we should take the 30 yr fixed offer at 4.62% (Wachovia to pay ALL costs assoc. with closing). We are so cash poor with 2 in college right now and 1 on their tails. It might make more sense to take the conventional and just make an extra 13th payment dedicated to principal yearly. It has been a nightmare trying to just get this conventional loan moving. They are slow, overworked and one hand doesn’t know what the other is doing. We have an excellent credit rating, everything is in order and now over 3months later they still can’t get it right. I love the COSI loan, but I don’t trust what Wachovia is going to do.
I talked with a Wachovia rep yesterday and was told that they would switch to a new WF cosi index by the end of this year or early next year. I am content with the current downward trend of the cosi index so it will be interesting to see what they come up with.
All I know is that in the last couple of months, I have been contacted by three separate loan officers over at Wachovia/Wells who are trying to sell me on refinancing into one of their other loan products. They’ve been friendly and helpful, but I’m still taking a wait-and-see approach. I figure if they really want to close down this program, then their incentives will only get better over time.
Tom,
Be careful with any rate forecasts. The forecast you mention is about 1/4 point off just for last month. And, that is after the data has already been released.
I just got off the phone with their “VIP” department — these guys are a joke.
They have no understanding of how the rates are calculated. When I asked them why the current COSI isn’t posted on their website (https://sites.wachovia.com/misc/0,,1412,00.html) the rep. tried to blame the Federal Reserve and Mortgage-X.com for not posting updates — WTF???
Holy Crap!
I assume we’re talking about the “Pick-a-payment” type loans that are tied to the COSI.
If so, I’ve got a question for anyone.
As the minimum payment rises thru the years and, say the interest rate lowers as forecast, to levels that are below the minimum payment. Then, we would be looking at the difference being applied to my principal as a reduction to my balance. Is that correct? If so, then, I’m alright with the concept…for now!
Frankly, I don’t trust them in changing our terms and would like to be put into a fixed rate loan.
Not surprising that Wachovia/Wells Fargo would want to make big changes to the COSI index again. Everyone that took out the loan with World Savings originally has paid higher interest rates since 2005 with the expectations to see the rates drop over the past year. With Wachovia changing the index to weighted average of CDS’s as opposed to the former average for savings accounts as paid by World Savings the rates have remained essentially flat.
Good luck trying to get an answer from Wachovia on how they calculate weighted average and to what specific CD account programs and rates the COSI is tied to. For all we know the COSI could be weighted heavily to one CD product that paid a high interest rate and very little weight to their other CD’s.
Mark,
Would you mind sharing the department you spoke with? I’ve spoken with several departments at Wachovia and cannot get a straight answer as to what their plans are with the COSI “Pick A Payment” loans. I’ve also received conflicting information regarding the calculation of the index.
—SNIP—
Mark E. says:
March 24, 2009 at 1:12 pm
Called Wachovia this morning..Mortgage specialist told me that Wachovia wants to do away with all of these loans and the index. She said this program could start in about 4 weeks so you may get a refi at little or no cost
—SNIP—
Tony,
Thank you for the thoughts — I’ve seen this website too, and we’ve been waiting (patiently?) for COSI to drop as expected, consistent with the drops in COFI and CODI. Frankly, we’re perplexed (and paying a hell of a lot more than expected) because of the slowly dropping COSI.
We’re hopeful that Wachovia is going to switch the index to a less-proprietary index (like COFI or CODI) but they would not be able to do so in a manner that is punitive to the borrowers — that would open substantial legal exposure to them. Accordingly, we are hopeful for a shift to an index that accomplishes what COSI was intended to (a truly lower rate in this current environment) — and this would be better for Wachovia too.
We will see — but, restating my point, I don’t expect a forced refi into a fixed rate, or a forced refi into a more volatile adjustable rate (like Libor or 1 yr Tsy) that is so different from COSI when better surrogates are available.
Good luck to all,
Greg
The projected index for the cosi are expected to drop way below the current index thru 2014.
http://mortgage-x.com/general/indexes/cosi_rate_forecast.asp.
As a holder of a Wachovia cosi I would sure like to take advantage of the low side of the swing after being beat up on the slow
moving high side. I can see why Wachovia would want to do away with the cosi before THEY get beat up. I’m currently at 3.60
and going down. It really would not make sense to refinance into a fixed 6.0-6.5 and lose the advantage of a lower rate for next
few years. We’ll see what they come up with but be careful what you wish for.