HUD Homes / VA Homes News

The U.S. Department of Housing and Urban Development will sponsor a free homeownership workshop in Detroit at the Metropolitan United Methodist Church on Thursday, November 15, 2007 from 2:00 to 8:30 p.m. More...

The credit crisis in the U.S. got worse on Friday morning as Wachovia reported a $1.1 billion loss related to subprime mortgage debt in October, while credit card issuer Capital One stated that more of their customers are missing their monthly payments.

Shares of both companies tumbled amid broad declines in financial stocks. Wachovia, which is the fourth largest bank in America, reported that the value of its asset-backed debt obligations fell to $676 million as of Oct. 31 from $1.8 billion on Sept. 30. The $1.1 billion pre-tax loss is in addition to a $347 million loss in the third quarter.

Wachovia also expects to boost loan losses by $500 million to $600 million this quarter, because of declines in housing values.

Wachovia joins a growing list of financial companies -- Citigroup, Merrill Lynch & Co, and Morgan Stanley -- that have reported losses from worsening conditions in consumer credit and capital markets within the past week.

On the credit card side of things, Capital One, the largest MasterCard and Visa issuer, said on its rate of net charge-offs climbed to 3.28 percent in October from 2.86 percent in the third quarter.

The general charge-off rate in U.S. cards rose to 5.11 percent from 4.13 percent in the same period, while the rate of card loans at least 30 days past due rose to 4.75 percent from 4.46 percent.

On Tuesday, Capital One boosted its forecast for 2008 credit losses to between $4.9 billion and the mid-$5 billion range. It had projected $4.9 billion on Oct. 18.

Wachovia and Capital One made their disclosures in U.S. Securities and Exchange Commission filings.