Wachovia mortgage program draws complaints

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.

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