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
Yes, I think this is a scam too. I have several properties with adjustable rates–the others are now under 3% on 1 year arms, yet my wachovia is still 4.73 and this rate is able to adjust every two weeks. we are being ripped off (I’m currently accelerating this loan to pay off as quick as poss).
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Wow Bob, where did you find those rates. On Wells Fargo’s own site (Wachovia as well) their CD rates in my state are as follows:
Standard CD rates:
3 months = 0.05%
6 months = 0.10%
1 year = 0.15%
Special Offers (CD’s)
11 months (Renews for 6 month term) – 0.15%
26 months (Renews for 24 month term) – 0.40%
45 months (Renews for 36 month term) – 1.05%
58 months (Renews for 48 month term) – 1.90%
Here’s the link: https://www.wellsfargo.com/savings_cds/cds/index2
Update – Since the COSI = “Cost of Savings” I did an online check of current CD rates. I found 1 YR CD = 1.33%, 2 YR = 2.0%, 3 Yr = 2.75% and someone offering 3.5% for 10 yr. If you take the average of those 4 rates, you get 2.39%. WFB COSI is currently shown as 2.24% (Google search for Wells Fargo COSI), so it no longer sounds quite so fishy (though I may look to do a refi with a direct lender (Amerisave, Network Capital, or anyone else I find) where I can pay $0.00 closing costs for a 5 yr ARM and lock in a lower rate).
Has anyone queried the banking commission on the determination of the COSI ? They too may get the run-around, but Wells Fargo will be forced to take a closer look at what their staff are doing. My interest rate decended to 5.06%, an stabilized there, while all other variable rate loans have dropped to 3% or less. Smells fishy to me.
The COSI has been drifting up. This does not pass the smell test. Is anyone still concerned? Has any progress been made in determining how the “weighted avg.” is calculated? Have any law suits been filed to determine this? Can an independent auditor audit Wells Fargo’s auditor? Like many of you, I have been told the info is proprietary. However, without oversight we all know what banks are capable of. A self determined internal index which magically levitates higher is just Well’s self dealing hocus- pocus. Why wouldn’t Wells want clarity for its cutomers? Perhaps because it wants to obfuscate its slight of hand. Is there anyone left out there willing to fight on.
Response to Brian -
You must work for WFB.
As a customer all I want and expect with “what I signed up for” is transparency. Wachovia and WFB changed this index – not me. Think about it. They could have applied 99.9% of the weighted average to one single CD that they sold and this CD could not mature for 10 years and the other .1% to all their other CD products. Go ahead and try and call and get information from WFB on this all you get is the run around and double speak from the “VIP” department. In changing this index the way that they have this is a total game changer to the 100% transparent World Savings product that we all signed up for.
Response to Brian
I agree that the current COSI is not unreasonably high, nor is it it particularly low – - and it seems odd that the index is stuck at 2.24% for months at a time when interest rates continue to fall.
But that aside, the World Savings representative who sold us this loan years in 2006 essentially assured us that we “could always refinance” the loan in the future. Although our creditworthiness has remained the same (or even improved) in the last 5 years, the value of the house would more than cover a refinance (this was a refi and the LTV ratio was only 20% and is still about that today), the property — which is a family vacation home I own with my siblings — is in a family partnership and now nobody — and I mean nobody — will loan to a partnership post-crash.
So how WE got screwed is that we entered a transaction as a partnership which was fine and dandy in 2006, but in 2010 we are anethma to Wells Fargo and every other lender. We have timely made our payments for the past five years — except a 3 month period when we were tyring to force a loan modification, which did not work.
So what has happened is that the loan market has swung from irrational exuberance to irrational fear. Refinancing our loan into a lower fixed rate, or another index based ARM would present no risk to Wells Fargo — and indeed would probably lessen their risk, since, if we can lower our payments, it would decrease, not increase, the risk of default.
But the loan market is just as irrational now as it was in 2006 — the difference is that the pendulum has swung to caution from “party time.”
There are a million ways to get screwed in the Naked City, this story is but one of them
BH
To Catherine:
Who exactly has been “screwed” by these loans? I found my rate to be incredibly low, dropping 0.4% on the switch to WFC Cosi. My current rate on my loan is 3.64%; pretty unbelievable. That’s the cosi with 1.4% added to it.
The COSI is the weighted average of all outstanding CD’s; NOT just the CD’s the are issuing now. So if some WFC or Wachovia bank client bought at 10 year CD nine years ago, and got 6.0% on the rate, that is included in the COSI.
What is so difficult here? You signed up for this loan, so quit your bitchin.
All,
In case you didn’t see it, a new moneycafe.com blog has formed on WFB COSI — and we’ve continued the conversation of there. The link is:
http://moneycafe.com/blog/2009/12/wells-fargo-cosi-replaces-wachovia-cosi/
Please join us there. Thank you.
Sounds like more of the same run around from this outfit. The only thing that will get these people to come clean is either a lawsuit or investigative report from the WSJ, CNBC etc.
Wells Fargo has some serious explaining to do. First they send out a letter STATING that the Cosi Index will go down. Why, how, what is WFB’s basis for this?
The original World Savings deal was “average” of savings account rates paid at the end of each month. Wachovia duped everyone when they switched terminology to “weighted average”. Question remains weighted average of what and how are weights applied. If they apply 99.9% of weighted average to some obscure high yielding CD they continue to screw everyone that originally took out a World Savings mortgage.
PLEASEEEEE someone from the WSJ or a good lawyer find out what is going on and put an end to this and payback all mortgage holders that have been screwed by these people (especially the VIP desk).
COSI Borrowers,
Well, today was the day they published the WFB COSI, and unfortunately, I am underwhelmed (and my prediction was way off). The WFB COSI was published at 2.4% at the following website:
https://www.wachovia.com/foundation/v/index.jsp?vgnextoid=8ca9c89da11aa110VgnVCM1000004b0d1872RCRD&vgnextnoice=1
It’s not clear to me how this reconciles to WFB’s CD rates (closer to 1.2%), we will have to keep watching. The website indicates that it is the interest rates paid to individuals that have CD’s, not all CD’s….
Thanks and good luck to all,
Greg
Thanks Jonathan.
Bill,
i know of no way to reproduce the letter on this blog site. However, the cover letter and Q/A sheet state that a new index called the Wells Fargo COSI will be used in place of the Wachovia COSI because “the accounts used to calculate the Wachovia COSI will begin to convert to Wells Fargo accounts and, as a result, Wachovia COSI will no longer be available….”
Other answers include: “The initial Wells Fargo COSI can’t be calculated until November 2009, but we expect the initial Wells Fargo COSI to be lower than Wachovia COSI.” “The index conversion will occur with your first interest change date on or after December 14, 2009.”
The answers describe Wells Fargo COSI as “based on the interest rates the depositary subsidiaries of Wells Fargo & Company pay to individuals on certificates of deposits (CDs), also known as personal time deposits. The index is calculated using the weighted average of all the interest rates paid on CDs held by individual depositors as of the last business day of the month. The Wells Fargo COSI is calculated exactly the same way as the Wachovia COSI and will include both the Wells Fargo and Wachovia certificates of deposit.”
Finally, the Q/A sheet states that “Your margin will not change”, and “Your Minimum Payment will not change as a result of the index conversion, and it will remain unchanged until your next loan anniversary. At that time, your new Minimum Payment will be calculated in accordance with your loan agreement. All of your other payment option amounts will continue to change monthly, just as they do today.”
The cover letter concludes with “if you have questions, please contact our Customer Service Center toll-free at 800-326-1334 or commercial.servicing@wachovia.com. We are available Monday-Friday, 8 a.m.-6 p.m. ET.”
Hope this helps. Good luck to all.
Could one of you who have received the index change letter from Wells Fargo reproduce its text on this blog? We have not gotten a letter yet, though we assume our index will change along with everyone else’s. BNH
Tony,
Let us know the conversation goes — that’s interesting that they called you.
Our original World Savings loan states that the COSI is based upon the depository accounts at Golden West, including the savings accounts. (This was largely irrelevant as most of Golden West’s deposits were in CD’s, and not savings accounts, anyway). When Wachovia took over World Savings, they substituted their own Wachovia COSI for the old Golden West COSI.
All subsequent literature by Wachovia on how the Wachovia COSI is calculated states that it is based upon certificates of deposit only. So they did change the population for the COSI from what was in our loan documents. However, they are allowed under our loan agreement to substitute a new index (the Wachovia COSI), as long as their regulators approved it.
Now that Wells Fargo is taking over, and introducing their own COSI (which is based upon CD’s only), it’s unfortunate for us borrowers that the Wells Fargo (presumably) COSI excludes Wells Fargo’s savings accounts — which pay virtually nothing. I was really hoping that Wells Fargo would include their savings accounts in their COSI, but it doesn’t look that way.
So, do expect a Wells Fargo COSI that mirrors their CDs — which are still lower than market. I think this will be a great index for us. I hope this is helpful.
Good luck to all,
Greg
I have another issue that maybe a reader could explain to me. When did the Wachovia COSI loan turn into a CODI. Every Wachovia reference to explaining a COSI states “COSI is a unique index available through Wachovia. COSI is based on the interest rates Wachovia pays to individuals on certificates of deposit.” I my mind this sounds more like a Certificate of Deposit Index. A month or two ago I filed an complaint form online with the Federal Trade Commission stating where and how can I verify this unpublished index. Low and behold I got a call (left message) today from a Wachovia representative in San Antonio Texas wanting to discuss the indexes. To be continued……………….
Tony raised a good question. Wachovia’s letter to us, which advised of the new Wells Fargo COSI to replace the Wachovia COSI, included a question/answer page regarding the conversion. The answers stated that the index conversion will occur with our first interest change date on or after December 14th, the initial Wells Fargo COSI is expected to be lower than Wachovia COSI, and the margin will not change nor will the Minimum Payment. They also stated that the monthly average of the new Wells Fargo COSI can be obtained after December 14th by calling (800)-326-1334 or by visiting http://www.wachovia.com.
Historically (prior to 2007/2008), the World Savings COSI matched the COFI pretty closely with regard to the shape of the curves, and the highs and the lows (see moneycafe pages on these indexes.) We can hope that the Wells Fargo COSI, with its influx of recent low interest rate cd’s originated by WFB, will lower the weighted average cost of savings and return to this pattern.
Why did WFB elect to create a new COSI rather than simply revert to a publicly disseminated index such as COFI or CODI? As Greg Nevetz said many moons ago on these blogs, it can’t be easy to create your own index. I can only surmise that WFB has to also satisfy the investors/purchasers of the securities backed by our mortgages, and that strict adherence to the terms of the loans is safest and easiest for them. Would appreciate any other opinions on this subject.
I am not an employee of any bank (let alone WFB or Wachovia), but a simple borrower who enjoys studying this issue with my son and fellow blog contributor, Greg Tibbitts. As he says, good luck to all.
Tony,
Great question – their letter specifially stated the margin will not change, just the pool of CDs (now WFB’s) that are used to compute the index.
This is a real positive for us.
Good luck to all,
Greg
Please straighten me out if I am wrong, but a conversion to the WFB cosi index would adjust your margin to equal your interest rate at time of conversion. Wouldn’t everything just be relative? I would hate to miss out on Wachovia’s continuing drop in index.
Interesting news COSI borrowers,
We just received a letter from Wells Fargo indicating that they are replacing Wachovia COSI with a Wells Fargo COSI, effective in December. They indicate that this will be calculated in exactly the same manner as the Wachovia COSI, using “personal time deposits”.
I think this is a major breakthrough for us COSI borrowers — Wells Fargo’s cost of funds (for CD’s) is substantially lower than Wachovia’s CD rates. You will recall that Wachovia (and World Savings before them) were heavily dependent on CD’s to fund their balance sheet, and therefore paid higher rates that Wells Fargo.
Wells Fargo is a retail-oriented bank that funds their loans from their deposits and savings accounts which represent a major percentage of their deposit base than CD’s. You can also see this by comparing Wells Fargo’s current CD rates with other banks — they are lower, in some instances, much lower.
I believe we will benefit greatly from our new Wells Fargo COSI for years to come, especially as rates turn higher in the longer term. Frankly, in that environment, I think we will substantially lag other variable indices (CODI) as WFB remains focused on its savings and checking account base, and not dependent on the more expensive CD’s.
This is pure speculation, of course, and we’ll know more in December — but let’s hope for a WFB COSI rate that is in the lower 1% range, versus the current 2.94%. It is possible that we may see a WFB COSI starting out around 1.50%, and staying there for quite awhile.
Good luck to all,
Greg
New COSI rate was published today, as of 9/30/09 — it’s 2.94%, down from 3.12%.
Best to all,
Greg
My sincere apologies to all who replied asking questions about my modificatoin, I even had a call, great detective work. However, I have not done a good job of the follow up questions by those still working on the mods.
I called these numbers and used these faxes. Not necessarily used in the order they are listed. However, they might be on second look
800-642-0257 x35878 loss mitigation
888-308-3964 loss mitigation
888-345-1352 loan counseling
866- 975-5640 loan counseling
866-997-0001 loan counseling
800-909-1825 VIP service
210-509-1167 Fax (Office of the President) / faxed every week for several weeks
866-642-9407 Ofc of Pres. / called asking for help in a modificaiton
800-853-8516 Wells Fargo Ofc of Pres.
Letters mailed to:
Loan Mods Dept: Wachovia
Mail Code PX1351/LQA
4101 Wiseman Blvd
San Antonio TX 78251
P.S. If you use my name when calling or using in an example, that will truly be considered cheesy. I didn’t do it so you don’t do it. Everyone’s situation might be similar but each client is different and unique in that each case will have differing elements so be creative, be organized and dont stop calling, faxing, and mailing.
Darryl:
Can you let us know whom you worked with, and a contact number for them? Your deal seems unbelievable!
Well all i know is that it seems that they have somewhat modified my load ..i no longer have 4 options to my pic a payment loan and the the rate is down to 5.86%. i now have 3 options and all of them have a principle in them..i never went with the neg am option..i went with the 2nd option most of the time which was interest only, it seems that that is gone to. i think its better..thank god they did something to this loan…..just thought id write to see if anyone else had their mortgage modified some sort…thanks …
Updated COSI today on the Wachovia website – 3.22%
Wachovia is working on loan modifications right now. You may want to call and see if you are eligible. We are being reviewed right now. Good luck to us all!
great job darryll!!!!!
Can you tell us which costumer service number you contacted?
We have a situation similiar to yours and we are going negative.
Thanks!
john e.
Darryll,
Congratulations! I’ve been checking in on this blog to see if anyone else had successfully completed a loan mod. I believe others may have been successful as well–the problem is that once these folks are approved for the modification they ditch the blogs, boards and forums for good.
Darryll Whale here. I have enjoyed reading everyone’s posts. I thought I would lend some encouragement to all of you trying to modify out of the old World Savings COSI loan that didn’t benefit any of us. Just last week, I got the mod papers in the mail from Wachovia. I was trying for a mod with Wachovia for the past 8 months until I finally got a call from someone in underwriting. In the last month of trying for a mod, I had faxed letters to the office of the president for a month straight, twice a week! I am not sure what finally did it for them, whether if it was because I repeatedly asked them to retroactively back out all of the non-capitalized and deferred interest I had incurred because I wasn’t given another option when they took over World Savings portfolio, (not giving me another option for a new loan) or becaue I showed them that I had placed a sizable amount down on our house when we moved in here and it was now gone because of the severe drop in prices in our neighborhood. I had also faxed them the county tax assessors valuation, which was really low as well.
At any rate, I cannot pin point what it was, but I can tell you that I was organized in my endeavor, faxing and calling repeatedly. Anyone actively engaging in a mod attempt shoud have their ducks and facts in a row. I will say that those you call in loan counseling are not entirely saavy so be patient and keep calling because their are several call centers. One girl didn’t know what a jumbo loan was. They do have a VIP line you can call as well and those folks are definitely a step up from those in the standard loan mod and loan counseling departments, at least from my experience.
Let me tell you what I was working with: I originally bought the house for $1,205,000 with $240K down. I took on a first loan amount of $964,000 and over the last 2.5 years added 56K to the principal balance, bringing my new loan amount to $1,020,000.
The Mod: A new 40 year term at 4.3% fixed with the first 10 years being interest only and the last 30 being fully amortized. I had my principal balance reduced by 184K as well.
That being said, I am back in the black and the one monthly payment I now make is lower than the original minimum payment when I began the loan. I was not required to have my loan bundled with the taxes and insurance either.
Hope this helps.
Darryll
Wells Fargo has just released interesting comments regarding integration timing on blog.wellsfargo.com/wachovia. It implies that Wells Fargo will be assuming Wachovia loan servicing functions “later this year”, which should give us a real person to speak to at Wells Fargo loan offices. Let us hope that this action will lead to substitution of a legitimate and publicly disseminated index for the Wachovia COSI. Good luck to all.