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Citigroup Acquires Most of Wachovia; Not a Failure, FDIC Says

More than 28% of US homeowners underwater on their mortgage Mortgage holders who think they are underwater are far more likely than those who do not think so to have had problems paying their mortgage over the past year (33% vs. 10%), to have had a mortgage or credit application denied (28% vs. 8%) and to have had problems with collection or credit agencies (27% vs. 8%).

Citigroup also will grant the FDIC $12 billion in preferred stock and warrants. The FDIC asserted that Wachovia didn’t fail, that all depositors are protected and there will be no cost to the.

"Wachovia did not fail; rather, it is to be acquired by Citigroup Inc. on an open bank basis with assistance from the FDIC," the agency said. Under the deal, Citi granted the FDIC $12 billion in preferred stock and warrants to compensate the FDIC for bearing this risk.

Citi agreed Friday to take $100 million from Wells Fargo to settle lawsuits tied to the fall 2008 battle for the remains of the failed Wachovia bank. Obviously, $100 million is not exactly chump.

Wachovia has 1.3 million Visa and MasterCard credit card accounts. The FDIC has agreed to a loss-sharing arrangement with Citi to cover Wachovia’s pool of $312 billion of bad mortgage loans. Citi will absorb up to $42 billion of Wachovia’s losses and the "FDIC will absorb losses beyond that," according to the FDIC.

Citigroup Acquires Most of Wachovia; "Not a Failure," FDIC Says. Citigroup granted the FDIC $12 billion in preferred stock and warrants to compensate the FDIC for bearing the risk of loss beyond the initial write-off; not surprisingly, shares in Citi were off more than 7 percent in pre-market trading as a result,

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Citigroup would acquire most of Wachovia’s assets and liabilities. The FDIC would agree to share future losses on a pool of $312 billion in loans, and Citi would agree to absorb up to $42 billion of future losses on the pool; if losses exceeded that amount, the FDIC would absorb them.

The collapse of Wachovia Corp. may not have served as the. “Wachovia's collapse ranks as one of the most significant financial. “The FDIC's resolution of Wachovia was to the Great Recession.. Alvarez said Wachovia's fate likely was sealed with the failure of Washington Mutual and subsequent Sept.

Citigroup Inc. will acquire the banking operations of Wachovia Corp., one of the nation’s largest banks, in a deal facilitated by the Federal Deposit Insurance Corp.

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