When she stopped by a Wachovia branch in Charlotte last month, Marilyn O'Connor asked about refinancing her townhome. Instead, she got a pitch for a "Pick-A-Payment" mortgage that offered flexible payment options but a higher interest rate.
O'Connor said she initially agreed to apply for a Pick-A-Payment loan until she learned the interest rate. The full principal and interest payment option had a rate of 6.85 percent, higher than the 6.75 percent rate on her existing mortgage. A regular 30-year fixed rate at the time had a 5.5 percent rate, according to her loan documents.
Since buying Pick-A-Payment specialist Golden West Financial in 2006, Charlotte-based Wachovia has been rolling out these nontraditional loans at branches and mortgage offices around the country. But the push has become a sore spot with some customers and employees. Loan officers say they have faced intense pressure from the company to persuade borrowers to use the loans.
Read the full story at Charlotte.com.