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.

136 thoughts on “Wachovia COSI”

  1. I’m surprised the rate has stayed fairly steady since they stopped publishing given that overall rates have dropped significantly (including CD rates which is what their COSI was based). I’m hoping the next month will reflect some of that, otherwise I’m going to investigate more with Wachovia.

  2. I believe the quicker one gets out of this COSI loan the better. Its a bloody bad loan and the index will significantly increase when Wells Fargo completes its acquistion. Get out fast.

  3. This was a really good loan originated by a really good company (World Savings) that has been turned really bad by a really bad bank (Wachovia).

  4. thanks for the updates on the cosi loan.. I really had no way of knowing that I should or shouldnt get out , and get in a fixed…thanks again,,the refi is done 5.5 30 year

  5. Steve must be a former GW or World Savings employee. If they were orignating such good loans, then why are they all going bad on Wachovias bookds?

  6. Hi we are also in this COSI loan that came from World Savings. However Wachovia came to us and asked us to refinance to get out of it (meanwhile we pay our mortgage on time every month) so we did the application-we were also going to buy down the mortgage with substantial money and they declined us!!!! Would love to get into a 30 yr fixed!!! But the left hand doesn’t know what the right hand is doing over there at Wachovia!!!! A mess!!!! Why haven’t we seen the interest drop on our COSI loan with all the other rates????

  7. I called up Wachovia and got forwarded to someone who can tell me why their rate is going up when the 2-5 yr CD rates are dropping. Since no one knows anythin about it i feel there is something fishy. The 2 yr-5yr cds are both well under 2%, yet a weighted average including these is rising. There is no way this is possible unless Wachovia is cooking the books. Theoretically according to our loan documents, they could switch our index to a CD index that pays there executives 10%, then the loan holders have 10% as their new index. I guess wachovia has never heard of fiduciary duty.

    I was told to fax a request to Cynthia Scott, HQ Liason, at 210-509-1167.

    Send your name to info@hottengroup.com if you want to be updated on the investigation

  8. World Savings would of probably failed with or without Wachovia buying them. Wachovia only accelarated their demise, while a bunch of senior managers made lots of money. The option arm was exposed during a declining market.

  9. I have contacted Wachovia regarding my COSI mortgage about options that are available to me in terms of getting a lower rate.
    They only have one program that will be available til the 27th of December which is a total refi. They will take an app. and an
    underwriter will get back with an offer. There is no fee for app. and Wachovia will take care of all fees associate if I take care advantage
    of the offer proposed to me. They basically want people to get out of COSI loans or/ Pick-A- Payment. The guidelines would be
    any difference from the appraised value will be a second loan with matching interest or lower from you primary loan. They could
    also offer 2-3 years of deferred payments for the second loan. You must not have filed for a bankruptcy, have stated income, good
    credit. This would be a FHA loan with full amortization. I have hold out on this to see what would happen with Wells finally takes over
    by the end of this year.

  10. I was told that the rate 3.76 this month, but this index seems to have flat lined, Wachovia says that the info is on their website but I can’t find it, something fishy going here?

  11. Wachovia confirmed with us today that the rate is now 3.78%. This was last calculated by them on December 15th and is the November rate. COSI customers, please let us know what they are publishing on your loan statements regarding the current rate.

  12. Pete, the last time they updated their website was 2 1/2 months ago. The next time they tell you to check the website ask them where it is.

  13. I would like to see all the customers they say they are paying 4% for deposits. The Cost of Funds Index has been less for quite a while.

  14. I understand the frustration over not being able to find the index…I get that. But, most complain about the COSI rate being higher than d the COF, well, you should have understood the loan you were being sold. I am tired of everyone complaining about Wachovia. World (GW) were the snake oil salesman that sold you and Wachovia a pile of junk. Should Wachovia have been smarter? Yes. Should you have? Yes.

  15. Wachovia had a plan about 2 months ago they were offering on a loan modification. I put about 220k down on my place and unfortunately bought at the high. I tried to refi with this program but they told me today the loan modification programs are no longer available and a refi into my current place would require 20% down. My current rate is 6.5% and loan at 470k. I have good credit and about 10 years of home ownership but was still denied. I made my last phone call 2 weeks ago for an update and still am waiting for a call back (just received the denial letter)….I called general customer service and they said the program that Ray describes above is no longer available. This process took about 2 months from application to the letter.

  16. This is what I received from Wachovia today:

    The interest rate on your loan has a margin and an index. The margin on
    your loan is 2.79%. The index is based on the Cost of Savings Index
    (COSI ). The COSI is based on the weighted average of all the interest
    rates paid on certificates of deposit held by individual depositors for
    Wachovia available the last business day of each month. The COSI is
    currently 3.76%. The margin plus the index means your interest rate is

  17. Well Kris, the COFI is also increasing as well. Wachovia has nothing to do with that index. You would probably love to have an option arm based on the 12 month treasury average (MTA), wouldn’t you? Simple point is, as fast as your rate can fall, your rate can rise. All of you complaining that your rate isn’t low enough should be happy the bottom hasn’t dropped out of it.

    And by the way, blame yourselves and not Wachovia. You signed the loan. You took the loan. You are to blame.

  18. I just spoke with someone at the “VIP desk”. He assured me that this program has not been neglected and that the rates are still valid based on the CDs for $1M+ packages (never knew there was a qualification for the size of those CDs).

    One useful bit of information of which he did inform me was that Wachovia has done away with their pre-pay penalties and that they would be happy to get me into a new fixed-rate mortgage for absolutely zero cost to me.

    Couldn’t hurt – I started the process. If I could drop it 1.5%, I’d be very happy.


  19. I believe your COSI index is about to drop significantly — I believe the index is based upon a basket of the underlying deposits that the lender pays on, and that today’s rate would include 6-12-18 month CDs that are in the middle of the terms now, but will be expiring soon. As soon as they expire and are reset to current interest rates (which are terrible) then Wachovia’s cost of funds will decline dramatically, and be reflected in a lower COSI.

    I’ve found a website that predicts a steadily dropping COSI, bottoming out at 1.7% — a full 2 points below today’s rate — by mid next year.

    A question — are your COSI loans that you’re refiing into fixed loans single family or multi-family?

    Thanks and good luck to all.

  20. I also tried to refi our loan with Wachovia as well we started the process back in September- we already have 20% equity in our home and we were going to put down an additional cash downpayment so we would then have 37% equity in our home. Anyway one hand did not know what the other was doing- I could hardly ever get a PERSON on the phone and 2 months later we got a letter that we were denied. I called a million different people to figure out what was going on…a few of them said they never had any record of our application period. Finally I got a person and they said the only way they would refi our loan is if we could prove we have 7 million in the bank!!! They also said there was no reason for us to refi out of the pick a payment loan because we were such good customers and paid our mortgage on time every month. We did not go to them to refi…they came to us…offered us a great deal and then turned it down once they realized they would make a lot more money off of us if they didn’t do the refi….lets see what Wells Fargo does….

  21. Wachovia is in violation of their fiduciary duty. This is one of the worst examples I have seen of banking misconduct. They are saying that we as consumers should pay the “corporate rate of savings” which is 3 percent higher that the actual rate. This is probably the biggest ripoff in banking history. Basically they are finding corporate and institutional clients (very few individuals have this amount at Wachovia, I would guess you cold count them on one hand) and paying them over market rates out of our house’s equity. It is redistribution of wealth from individuals to companies associated with Wachovia and is at the least a conflict of their fiduciary duty and at worst, what i fear: a last ditch effort by Wachovia executives to keep their bank solvent before defaulting and looking for a taxpayer bailout. This is a very bad sign for Wachovia.

    To those on this site saying that the rate is going to 1.7 or that we knew what we were signing The site that says the rate is going to 1.7 predicted this months rate at 2.1 not 3.8 ish. And the documents we singed were regulated by very strict laws with regards to fiduciary duty to the borrowers. Please people be honest, I think these individuals are PR for Wachovia or Employees in on it.

    I have been a mortgage broker for 10 years. I have and have had these loans and have put clients into them. All of these loans have been honest until Wachovia cooked their books.

    I am currently spearheading legal action, which will tie up Wachovia in court for months if not years and will settle the loan balances between 30-50% of current amount. In addition these lawsuits will

    To be added to the list please email your name and contact infromaiton to: info@hottengroup.com

    Forecast for COSI (this is total BS, just look at Decembers forecast then look at your statement, seeveral months ago we supposed to be in the low 2s by now.)

  22. PS I think it is time we make an example of one of these banks. I nominate Wachovia. It is not just the executives who need to be indicted, every employee at any level who knew, should of known, or ignored should be indicted and get at least a minimum sentance, no probation on the appropriate charge.

  23. “a last ditch effort by Wachovia executives to keep their bank solvent before defaulting and looking for a taxpayer bailout”

    Dear Dale, Y

    You are misinformed and if you are in fact a mortgage broker as you say you are, I wouldn’t finance a tricycle with you, let alone a house. As of the date of your post, January 29, 2009, Wachovia is no longer an independent company. It was merged with Wells Fargo on December 31, 2008. Since this happened, how could this be a last minute attempt by the bank to stay solvent?

    To your point that all of these loans were honest until Wachovia took over them is ludicrous. Option ARMS have always been known as liar loans. Indy Mac, Countrywide, Option One, Golden West and many others have offered this crap product for years. Wachovia got into this sector as a result of it’s purchase of Golden West. To blame Wachovia for the market or your rate is a mute point.

    You’re a mortgage broker and claim you didn’t know what you were signing? Again, to my point, you’re misinformed. You are screaming from the rooftops because your rate is not dropping as fast as you would like. Guess what? If rates were shooting through the roof, you’d be happy that your rate doesn’t make wild swings with the market.

    I’m sick of lack of personal accountability.

  24. I think Dale is more right than Drew. Drew you are wrong about Wachovia. These loans became the biggest part of their portfolio the day they purchased World Savings.
    These are great honest loans for the right people. The problem is that they were abused and people were put into these loans when they barely qualified for the minimum payment. World Savings put these loans out for years and had one of the lowest foreclosure rates of any institution. They were equity based common sense loans. The problems began when the market got hot and you could get these loans at 90-100% LTV.

    These are sophisticated loans for sophisticated borrowers. They are/were perfect for self employed people, investors, or those who want to agressively pay down their mortgage. Those business owners who are getting hit by this economy are certainly glad to have this loan right now. some of these people would be foreclosing because they would be forced to make a fully amortized payment.

    Go get them Dale!

  25. As an apartment investor with three good COSI loans originated by World Savings (my lender for over twenty years), I agree generally with Brian’s comments. Wachovia seems to have given up on a fair calculation of the COSI index and apparently will leave it up to Wells Fargo to figure out what to do. I would like to see the index changed to COFI (which World Savings used before they shifted to COSI, saying they were very similar indexes.) As an investor, the most valuable aspect of my present loans is that they are thirty year loans, which seem to be hard to find today. Perhaps Dale, the mortgage broker, could comment on that.

    A nice guy at Wachovia told me that the latest COSI rate is again 3.76. Would appreciate confirmation from someone who has received a recent loan statement.

  26. Dear Jonathan, Brian and Dale,

    It seems as though you have all banded together in your belief that Wachovia somehow took an honest product and ruined it by selling to unqualified borrowers…you are all wrong.

    Wachovia was not behind this move. Your beloved World Savings, the snake oil salesman from the West were the ones to ruin your beloved product. They had a lot riding on the pitch they made to Wachovia about the profitability of this loan. When the two companies merged, it was World Savings executives that took control at Wachovia Mortgage.

    The housing boom was cooling by the point the merger completed in 2007. Many of the loans that you blame Wachovia for originating had already taken place by this time.

    Ooooh….which brings me to the index, the beautiful cost of savings index. Thank God for the good people at moneycafe.com who actually have a brain to do the research that all of you complainers couldn’t. The new American way, “I don’t understand. It’s not my fault. It’s their fault because I didn’t know!”

    In the know,


  27. Gentlemen,

    This is an interesting dialogue — I hope that we can have a constructive conversation to help each other figure out what’s real and what’s not, and how to move forward.

    Please note: in reference to a preference poster’s question, I do not (nor have I had) any relationship with Wachovia/Wells Fargo/World Savings. My family has apartment loans with them (that’s Jonathan, also posting on this blog — by the way, good points, Pops).

    I agree with Dale that Wells Fargo (via their acquisition of Wachovia) has exposed themselves to a breach of their fiduciary obligation to the borrower if they are no longer computing the COSI as it was intended and make no reasonable effort to substitute a comparable index. I don’t object if they stop honoring COSI as was originally intended by Golden West/World Savings/Wachovia — WFB doesn’t want to support this notional or artificial index. However, they have a fiduciary obligation to provide an alternative that is a good surrogate — and COFI is a readily available, as my father has adroitly pointed out (and you can consider us to be collaborators on this, if you like, as long as you also consider the merits of the point).

    But we are all stuck in the situation right now where COSI appears firmly implanted at 3.76% in an environment where Wells Fargo’s cost of funds has declined dramatically, and should have resulted in a lower COSI rate. My personal interest income from Wells Fargo (savings account) was less than half in January of what it was in December — with comparable balances.

    Due to its legal exposure, I can’t believe that Wells Fargo is intentionally sticking it to us, but prefer to believe they have no idea what they’ve acquired and how to administer it. I continue to believe we will see a declining COSI in 2009 as WFB undestands what it has and begins to adhere to the COSI definition while they figure out how to wean us off of COSI. I suspect they will want us all out of COSI and will find a way to incentivize us to modify the loans (to our benefit). With time, they would be rid of their COSI loans.

    An artificially high interest rate in order to force us to refi offers too much exposure to them. But then, I’m a lowly CPA versus an exalted attorney!!!

    Good luck to all…

  28. Drew,

    I think you are getting the wrong idea. I am not blaming Wachovia for the downfall of this loan. The downfall of this loan came with every bank and their mother seeing an opportunity and selling it without understanding it. They were the snakeoil salespeople. I think the complaint with Wachovia is that they just decided to not honor the COSI index or at least replce it with something comparable like the COFI.

    The only people who offered this loan in the past were Downey Savings and World Savings. These banks understood this loan and who the market was for this loan. This loan was not intended for use of those who wanted to purchase more than they normally qualified for.

    There are plenty of people who have this loan and still love it. I have it on my rental and it sounds like Greg and Jonathon have used this loan and has worked for them. I doubt Greg the CPA would allow himself into a bad loan. There is no doubt that he understands the numbers and appreciates the way this loan works for him.

    The problem is that people chose to be tied to the Cost of Savings Index because you can understand it and when you understand it you understand how relatively safe it is. Unless you are hopeful that the bank will somehow begin paying you 10% on your savings, CD’s, etc you feel pretty safe that your rate was not going to go through the roof. Well now they have decided to keep the index at 3.76 when they are paying .25-3% max on savings instruments. This is what is wrong. This loan is designed to move witht he market. When the going is good the rate is higher when things get roungh the rate drops. It is all relative.

    I just don’t believe in casting a wide net as to the source of the crumbling housing market. This is everyone’s fault. I do agree that there were some that misled people when selling this loan. However, there has to be some personal accountability on the part of the people who signed on the dotted line. It was ok when the housing market was booming but now that they have been burned it is easy to point fingers. The bottom line is that there were loan programs made available for people to borrow, there were people who wanted to borrow, brokers who wanted to make the loan, and real estate agents to sell the home. They all played their roll perfectly and we are all feeling the effect.


  29. Thanks Drew for pointing out the obvious.
    Wachovia/World/Wells/Whatever, we should all be worried because our Caps on these loans are over 10% which could be realized very soon if this practice is not nipped in the bud by a lawsuit, which was my point.

    It was also my intention to save money, not loose all the remaining equity in my house when i changed from a 30 year fixed into a full adjustable, which over the last 30 years have outperformed fixed rate loans and in this market when 7 day money can be counted on one hand in hundrendths of a percent how can a rate which tracks the CODI be so far off?

    Regardless the bank contradicts and misleads its borrowers…Versus what their website says:
    According to the Wachovia webite, the Cost of Savings Index (COSI) “is a unique index available through Wachovia. COSI is based on the interest rates Wachovia pays to INDIVIDUALS on certificates of deposit. The index is calculated monthly and used to determine the interest rate on your mortgage. COSI is based on the weighted average of all the interest rates paid on certificates of deposit held by individual depositors as of the last business day of each month.”

    Unfortunately these are not INDIVIDUALS, these are corporations holding CDs this large and these sweetheart deals to other institutions (while taking big bonuses and commisions along the way) and then passing on the cost by sucking the equity out of consumers homes, is exactly why we have banking laws.

  30. I also called wachovia today to inquire about the interest rate on a cosi loan.
    They assured me, that with the new rate just out, on the next or one after payment
    I should see the rate start to get lower. I am considering waiting until the interest rates drop into the 4 or low 3 range and then refinancing into a fixed loan. This will help
    me feel better about this loan and I feel it will help the overall confidence situation.
    We do not know what wells fargo will do with these loans or if they have to honor the
    cosi !!! Seems like a risk to wait and see. The banks say they will refi without any fees
    What a deal, heheheh

  31. Like the loan or hate the loan the rate is being held artaficialy high and that is costing us all money. I have no hope that it will be fixed. A Class action lawsuit is about all they are going to understand at this point.

  32. JohnT says:
    February 23, 2009 at 9:33 am
    Like the loan or hate the loan the rate is being held artaficialy high and that is costing us all money. I have no hope that it will be fixed. A Class action lawsuit is about all they are going to understand at this point.


    How are you so positive that the rate is being held artificially (correct spelling) high? Do you know how the COSI is calculated? The COSI is based on the interest rates Wachovia pays to individuals on certificates of deposit. The index is calculated monthly and used to determine the interest rate on your mortgage. COSI is based on the weighted average of all the interest rates paid on certificates of deposit held by individual depositors as of the last business day of each month.

    Consider the following: The entire pool of CDs that are calculated have been taken out over the past few years. Just over a year ago, Wachovia and many other lenders were selling CDs at rates above 4%. During the boom of the past 5 years or so, rates on CDs were anywhere between 2-5%. Would you not assume that there are a lot more CDs out there at the higher rates since they have the better returns? Thus, when you average the rate of all the CDs currently being held by customers, it is going to be higher than say the COFI, CODI or MTA.

    Since CDs are back to paying at or below 2%, fewer new CDs are being purchased. This is preventing lower rates from being averaged into the equation. If you would like to see your rate drop, by some really low rate return CDs. No one else is, which is exactly the point. Bank profits and values have been diluted to the point where they can no longer afford to pay substantial returns on stock, let alone CDs.

    I have worked in mortgages for many years and am well aware of how they work. I know that not everyone can spend the time to make sure they understand how all rates are calculated, but I would think that people would have enough time to understand how their rate is calculated.

  33. Hey Drew thanks for being so anal-retentive about my spelling it must be all your years in the mortgage business that helped you out with that fine attention to detail. You might want to check your paper clips I think you lost one. I would love to take the time to understand how my rate is calculated unfortunately Wachovia refuses to provide any back up information in reference to the CD rates they use to calculate the COSI. We are all just supposed to trust them. When I call Wachovia none of the people I speak to have any idea why the rate is higher. Why do I question it?
    1. The CODI is lower
    2. The COFI is lower
    3. The LIBOR is lower
    4. The MTA is lower
    5. Wachovia’s own Home Equity Credit Line Rates are lower

    In December of 2008 the COSI rate was lower. If it is based on averages and rates are going down how does the COSI go up over the past three months. Drew using your example of old money CD rates over the past 5 years the COSI rate would not go down for a few months only to come back up unless rates went back up. Last time I looked Wachovia CD rates where under 2% and have been for some time. When I took this loan out with World Savings the rate was based on Savings accounts and CD rates not just CD rates. When I took this out I was told that historically the COSI rate was lower compared to the above referenced indexes. Why was it lower? Because it was supposed to include low interest savings accounts? I realize that past performance does not guarantee future results but that doesn’t make it ok for Wachovia to just say that’s the rate trust us.

    If the COSI rate should be higher Prove it Wachovia!

  34. Drew,
    I have a scenario. I walk into Wachovia tomorow and ask them for a CD at 10% for one month and i am going to pay myself a commision and the Wachovia agent a commision. The amount is $1 million, the 10% interest will be added to Mr. Drews index for the month, capping his rate out and depleting Mr. Drews equity in the property. Then i am going to go back and do that every month. Wow, i and the bank agent make a commision every month and we get 10% interest. What a great deal. Except, this practice is against the law, it breaches the banks fiduciary duty by predatory lending, for they are creating a loan, over 10% that Mr. Drew will never be able to pay back.
    Case closed.
    PS Mr. Drew, being a loan processor does not qualify your comments. I doubt seriously you have ever brokered a loan, maybe worked in a branch under a CFL license, but that’s the equivalent of selling hot dogs on Wall Street. PS say hi to your colleagues at the supermarket branch of Wachovia, i mean Wells.

    Actually in the know

  35. Dale,

    Wow, such hostility.
    I’ll give you a little of my background. I have never been a processor. Until December of 2008 I was a mortgage broker. I had closed over $75 million dollars in mortgages over the previous 3 years. I never sold this crap product because I never bought into the B.S. that World Savings/WAMU/Option One pitched. You losers did. God, if I knew people were so gullible I could have sold this type of loan and made a killing off of people like you. After leaving the origination side of mortgages, I now work for a servicing company. I get to deal with whiners like you all day.
    As for the ridiculous scenario you drew up about million dollar CDs. Please, scrape up $1 million and try to get a 10% return today. Please for the love of God, I’d like to see you try it. There is not 10% money out there. As for the cap on your mortgage being above 10%, guess what? It is like that on all adjustable rate mortgages…not just your crap loan. I truly have a hard time believing that your rate is higher than 6.5%. If your margin is higher than 2.25% then you got raped by your mortgage broker or originator. Again, your fault. If you had a standard 2.25% margin, your rate would be at 5.94%. How tragic is that?
    I love how you have this all figured out and are “in the know”. I’d love to turn on the news and see Dale from BFE laying out the facts. However, I think you’re a paranoid man who is pitching a fit because he wants something other than what he has. All the other indices are lower? I want mine lower.
    I’ve changed my mind after your CD pitch. I’ll be by to finance that tricycle later.
    Give me a break.

  36. Dale,

    One more bit of info on your 10% returns. The banks that took TARP are only paying the government a 5-8% return for the BILLIONS they took!

    Your Friend,


  37. Dale,

    One more bit of info on your 10% returns. The banks that took TARP are only paying the government a 5-8% return for the BILLIONS they took!

    Your Friend,


  38. The mere fact that the index remains exactly the same is puzzling since it is based on the “average” interest rate at the end of each month for all CD accounts. Wachovia needs to provide greater clarity on these accounts.

  39. Called Wachovia this morning..Mortgage specialist told me that Wachovia wants to do away with all of these loans and the index. She said this program could start in about 4 weeks so you may get a refi at little or no cost

  40. Mark E,

    Welcome to the blog — your information is very interesting. Do you know who you spoke with, I’d like to confirm it since that’s an important development. Any contact info would be appreciated.

    We’re trying to confirm with our contact (Paul Whittier) for multi-family properties, but it sounds like Wachovia has recognized they have a problem.

    Thanks very much,


  41. The projected index for the cosi are expected to drop way below the current index thru 2014.
    As a holder of a Wachovia cosi I would sure like to take advantage of the low side of the swing after being beat up on the slow
    moving high side. I can see why Wachovia would want to do away with the cosi before THEY get beat up. I’m currently at 3.60
    and going down. It really would not make sense to refinance into a fixed 6.0-6.5 and lose the advantage of a lower rate for next
    few years. We’ll see what they come up with but be careful what you wish for.

  42. Tony,

    Thank you for the thoughts — I’ve seen this website too, and we’ve been waiting (patiently?) for COSI to drop as expected, consistent with the drops in COFI and CODI. Frankly, we’re perplexed (and paying a hell of a lot more than expected) because of the slowly dropping COSI.

    We’re hopeful that Wachovia is going to switch the index to a less-proprietary index (like COFI or CODI) but they would not be able to do so in a manner that is punitive to the borrowers — that would open substantial legal exposure to them. Accordingly, we are hopeful for a shift to an index that accomplishes what COSI was intended to (a truly lower rate in this current environment) — and this would be better for Wachovia too.

    We will see — but, restating my point, I don’t expect a forced refi into a fixed rate, or a forced refi into a more volatile adjustable rate (like Libor or 1 yr Tsy) that is so different from COSI when better surrogates are available.

    Good luck to all,


  43. Mark,

    Would you mind sharing the department you spoke with? I’ve spoken with several departments at Wachovia and cannot get a straight answer as to what their plans are with the COSI “Pick A Payment” loans. I’ve also received conflicting information regarding the calculation of the index.

    Mark E. says:
    March 24, 2009 at 1:12 pm

    Called Wachovia this morning..Mortgage specialist told me that Wachovia wants to do away with all of these loans and the index. She said this program could start in about 4 weeks so you may get a refi at little or no cost

  44. Not surprising that Wachovia/Wells Fargo would want to make big changes to the COSI index again. Everyone that took out the loan with World Savings originally has paid higher interest rates since 2005 with the expectations to see the rates drop over the past year. With Wachovia changing the index to weighted average of CDS’s as opposed to the former average for savings accounts as paid by World Savings the rates have remained essentially flat.

    Good luck trying to get an answer from Wachovia on how they calculate weighted average and to what specific CD account programs and rates the COSI is tied to. For all we know the COSI could be weighted heavily to one CD product that paid a high interest rate and very little weight to their other CD’s.

  45. I assume we’re talking about the “Pick-a-payment” type loans that are tied to the COSI.
    If so, I’ve got a question for anyone.
    As the minimum payment rises thru the years and, say the interest rate lowers as forecast, to levels that are below the minimum payment. Then, we would be looking at the difference being applied to my principal as a reduction to my balance. Is that correct? If so, then, I’m alright with the concept…for now!
    Frankly, I don’t trust them in changing our terms and would like to be put into a fixed rate loan.

  46. I just got off the phone with their “VIP” department — these guys are a joke.

    They have no understanding of how the rates are calculated. When I asked them why the current COSI isn’t posted on their website (https://sites.wachovia.com/misc/0,,1412,00.html) the rep. tried to blame the Federal Reserve and Mortgage-X.com for not posting updates — WTF???

    Holy Crap!

  47. Tom,

    Be careful with any rate forecasts. The forecast you mention is about 1/4 point off just for last month. And, that is after the data has already been released.

  48. All I know is that in the last couple of months, I have been contacted by three separate loan officers over at Wachovia/Wells who are trying to sell me on refinancing into one of their other loan products. They’ve been friendly and helpful, but I’m still taking a wait-and-see approach. I figure if they really want to close down this program, then their incentives will only get better over time.

  49. I talked with a Wachovia rep yesterday and was told that they would switch to a new WF cosi index by the end of this year or early next year. I am content with the current downward trend of the cosi index so it will be interesting to see what they come up with.

  50. I have also gotten conflicting info regarding the new index. I don’t trust Wachovia at all. We’ve banked with them for years and I have friends that work for them. They are a sneaky organization and don’t treat employees well. We are almost 6 years into the COSI loan and trying to decide if we should take the 30 yr fixed offer at 4.62% (Wachovia to pay ALL costs assoc. with closing). We are so cash poor with 2 in college right now and 1 on their tails. It might make more sense to take the conventional and just make an extra 13th payment dedicated to principal yearly. It has been a nightmare trying to just get this conventional loan moving. They are slow, overworked and one hand doesn’t know what the other is doing. We have an excellent credit rating, everything is in order and now over 3months later they still can’t get it right. I love the COSI loan, but I don’t trust what Wachovia is going to do.

  51. Pat, I don’t know your circumstances, and so please take this with a grain of salt.

    If you are able to refi at 4.62% fixed, that is a phenomenal rate by any historical standard, and it’s hard for me to envision a likely scenario where this doesn’t beat a COSI-based loan day in and out. I hope you take it, and then stop by money.cafe every once in a while to see how we COSI borrowers are doing.

    Good luck to all,


  52. Greg-thanks for your input.

    FYI- any pick-a-payment Wachovia customer( former World Savings customers), are elgible for this refi deal (zero fees). At least this is what Wachovia tells me. I’ll let you know if they are true to their word when I get to the closing table in a few weeks.

  53. well i guess i better join the COSI club..for bad or for good…of course i am a former world savings customer and waiting for wachovia to do the right thing for us Cosi holders. of course they want to get them of their books asap but i guess they are swamped…but i do have a number for the wachovia modification program…..1- 800- 282 – 3451..they do update it.. it does mention that wachovia will contact those that will be able to qualify for a modification to their mortgage…..hope this helps and thanks to all the others who have helped by posted it is much appreciated………

  54. Pat ….Do you have a name and number of a rep? they just told me “sure we will refi you into a fixed rate and you will only have to give us $5900 in fees” It seems that no two people at Wachovia have the sme info ..Any help would be appreciated

  55. Hi Mark
    I’ve gotten quite the run around myself. I’m told they are working on over 15,000 refi apps right now and are very understaffed. I am in underwriting for the 2nd time due to THEIR mistakes and they will not let you lock in your rate. I’m going to raise hell if my rate goes up because of them dragging their feet. Anyway, you can start with the main # 866-489-7491. There is a mortage consultant named Robert (866-644-8991 x761274) who is not particulary helpful-he never gets back to you. Once you do get past him, you are assigned a mortagage processor. I would start with the main # and see where you get. They are (were) offering a ZERO cost conversion to a conventional mortgage. No fees rolled into loan, they are paying all fees. They have assured me time and time again I will not be suprised at the closing table- we will see.
    Good luck and let me know how it goes.

  56. All,

    More frustrating news in COSI land — I talked to the reps today, who indicated that COSI is still at 3.60%, and that it didn’t come down at all from last month.

    Perhaps this is why WFB has record earnings for Q1?

    Good luck to all….


  57. Spoke to the VIP department he confirmed the rate has not changed and is still 3.6%. He stated there were only regular refinance deals available nothing special for COSI loan holders. He stated that the index was made up solely of corporate owned CDs no individuals people at all; which is a new twist for me. But he did say that that concurred with the wording of the COSI definition as ‘individuals’ could also be corporations. He said I could fax the research department on 2105091174 requesting details of what CDs made which I did last month. I will fax again. This company is a fraud.

  58. I am selling my home paying off my COSI mortgate with them and would never consider Wachovia for a mortage. Don’t you think they are obligated to create an index that is close to the old COSI calculation for existing former World Savings COSI mortgage holders? Their VIP reps don’t think so. I was told that they could substitute any index they want to. I’ll bet some State AG’s might disagree with them on that, might be worth a call. Is there a class action here? Note that the 11th District COSI for member institutions of the Federal Home Loan Bank of San Francisco was a rate of 2.003% for April 2009 (source is Lending Tree site).

  59. All,

    I have additional (unconfirmed) thoughts on the COSI.

    I took the securities filings published by Wachovia in their 10-Q and 10-K and found (on page 111 of the September 2008 10-Q, for example) information which detail their ending deposits balance, and the related interest rate for each classification. The following categories are listed, and are available going back to Q1 2004, which is as far back as I went (sorry if formatting is skewed):

    Category Sept 2008 Int Rate

    Savings and Now Accounts $ 79,077 0.63%
    Money Market Accounts $127,097 1.41%
    Other Consumer Time $128,595 3.67%
    Foreign $ 24,654 3.06%
    Other Time $ 30,029 3.40%

    Total interest-bearing deposits $389,452 2.25%

    Federal Funds purchased and sold $ 39,429 2.47%
    Commercial Paper $ 4,421 1.46%
    Securities Sold Short $ 6,068 3.56%
    Other Short-Term Borrowings $ 8,280 1.68%
    Long-Term Debt $183,384 3.94%

    Total $631,034 2.76%

    I entered this same information into a simple spreadsheet, for every quarter going back to Q1 20004 and then attempted to recomputed the published Wachovia COSI — and was never able to exactly recompute it.

    However, I was able to come very close (within 4-15 bps for all quarters tested) by excluding from “Greg-COSI” the following: Savings and Now Accounts, Money Market Accounts, and Federal Funds purchased and sold. I believe that difference could be due to the use of average balances to determine the Wachovia-COSI, versus my use of the month-end balance above, but I also suspect there is some other variable here that I don’t understand as the swing is too great for it to be just average balances.

    I was also able to approximately recompute the old GDW Financial COSI by using only Savings and Now Accounts, Other Consumer Time, Other Time, and Long-Term Debt. What a great index!!

    Two things appeared to me, and suggest a conclusion. One, as we’ve previously discussed, the exclusion of Savings and Now Accounts has a major impact on the index, and have such a large, low-cost pool of deposits excluded from the basket of securities brings a higher base index that anyone accustomed to GDW would have expected.

    Two, and more interesting (and concerning), was Wachovia’s heavy reliance on Long-Term Debt to fund its balance sheet from 2004 to 2008. At the beginning of 2004, Wachovia had Long-Term Debt of $38 billion. By the third quarter of 2008, that number had grown to $184 billion, and was driving the growth in the balance sheet at Wachovia. This is very expensive money for a bank (as high as 5.44%) and due to its long-term nature, isn’t going to go away soon and thus, will remain a major component of the Wachovia-COSI index calculation.

    I’ve not yet found a good maturities schedule for this long-term debt as we will all be happier when this debt instruments have matured out of the index, and I will publish as soon as I have one. The nature of the long-term debt is unusual as well – sometimes notes payable to foreign governments or agencies (??).

    However, the existence of such a large, expensive and long-term bank liability has caused me to revisit my belief that COSI will continue to drop with the general declining interest rate environment. The substantial component of Long-Term Debt will continue to slow the decline of the index, which we have already been seeing. The only positive (such as it is) is that Wells Fargo is not likely to tolerate such expensive money on a permanent, go-forward basis, and if you have a long-term view of the loan, then once this debt is digested, the index should more approximate a true cost of funds for Wells Fargo.

    I’ll provide more information as I find it. Stating the obvious, my analysis could be (badly) flawed and I welcome other view points. My opinion is just that, and please don’t rely on it if you are making an investment or financial decision – however I am happy to help! Please let me know if you’d like a copy of the spreadsheet, my email is gregtibbitts@aol.com, please title the email Wachovia COSI. And I’m not affiliated in any way to Wachovia or Wells Fargo, except that we owe them money.

    Good luck to all,


    Website link to September 2008 Wachovia 10-Q:


  60. The rep at Wachovia said their COSI was based on “a selected group of CD’s”. World Savings’s COSI was based on an average interest rate paid to all depositors, Wachovia should be expected to honor the terms of the original loan agreements, when they purchased the World Savings loans. It seems to me that a class-action suit would succeed in recovering some interest paid from beginning of 2008, but I am not an attorney. I thought about a formal complaint to FRB but I can’t see their chastising a bank which they are actively helping to rip off the public.

  61. All,

    One clarifying comment from my following post — the deposit balances shown are in millions, so Savings and Now Accounts of $79,077 (at September 30, 2008) represents $79.1 billion.


  62. During one of my calls to Wachovia an account rep. made an interesting comment which caught my attention.

    I have *NO* way of confirming her statement but maybe someone here can help.

    She stated that new CD accounts opened at Wachovia are considered Wells Fargo deposits.

    If this statement is true, this means that current market conditions no longer drive the COSI. The account “pool” is closed and the COSI will only adjust when legacy CD accounts expire.

    If anyone would like to help in investigating this information please email me: sickofwachovia@gmail.com

  63. Good work Dave-Notice how the COSI is in line with the other indexes in a high interest environment,but a disparity develops and grows larger when rates fall. I spoke with a VIP rep a few days ago and flat out asked how the rate was calculated (knowing full well how it is SUPPOSED to be calculated) I got some double talk that did not even resemble what they are supposed to be doing. This was the third different answer I have gotten to this question.It is clear that Wachovia tries not to keep its reps armed with CORRECT information. It is also clear that when you have five percent CDs expiring and being replaced with one to two percent CDs the COSI rate should drop significantly. It’s also very improbable that the rate would stay exactly the same for two months in a row. unfortunately Wachovia continues to do what they want . Some legal action is definately in order. Does anyone know of any legal action pending?

  64. So it’s May 18th and the rate was supposed to change on May 15th but as I check the online my the rate as of 5/16 has not changed since last money and is the same as the last 3 months – 3.6%

    Now I’m not a statistician but an index staying the same for 3 straight months in this market…. WHAT A CROCK!

  65. I sent an email to Wachovia yesterday and received a reply that the rate for 5/14 is 3.55%. SLOWLY moving in the right direction.
    Also, as of this morning, the website appears to be updated with the new rate.

  66. How is Wachovia able to get away with this? What will it take to have the Federal Reserve, FTC or any other authorized government agency to start an audit process on their numbers? I beleive a more realistic rate on this index would be beteen 2.25-2.75 points.

  67. We are closing with them today on a 30 yr fixed rate at 4.62% with zero closing costs. I don’t trust them enough to continue with our COFI loan. It has been 5 months of dealing with incompetent, ignorant, temporary employees at Wachovia to try and close this loan. I have NEVER seen anything like this in my life! They are wrapping up this temporary program to get rid of the pick a payment loans. My suggestion is to jump on this loan if it is still available. I figure I’ll do a little prepaying to make up for the fact we will no longer be amortizing 2x/mo. I just can’t deal with these people anymore. They can’t mess with my index after today!

    Good luck to all all stick with the COFI/COSI/CODI loans!

  68. I am new to the discussion but have a former World Savings COSI loan and just got off the phone with the VIP department and was
    told that not only are they no longer offerign any modifications on these loans. My problem with this is I was told by my original loan
    rep that at any point during my loan I could swtich my loan to a fixed program for a $300 fee. As Early as last year Wachovia solicited
    me for the same program and now they act as if that was never part of my original loan. Any advice on how to proceed? They gave me
    a fax number to send a complaint

  69. Brent,

    Welcome to Wacovia COSI blog — I wish we had some words of encouragement for you, but it will be frustrating for awhile until WFB sorts this out. We are all trying to get some visibility on what WFB is going to do with the COSI index, which is now much higher than indices considered to be comparable.

    I would encourage you to post the fax number here, and then I encourage all of us to fax repeatedly, daily if necessary until WFB realizes that some action is needed.

    Thanks, and good luck to all.


  70. Despite my name and previous posts I believe Wachoiva is aggressivly moving toward doing away with the option arm “pick a payment” COSI loans.

    After 13 months of discussions (more like arguing with Wachovia) I finally recieved a phone call and modification offer. It has been signed, returned and recorded based on my last statement. They required a phone interview, 2008 Federal Tax Return and a current P&L statement (I’m self employed).

    More to come.

  71. Hey Sick – what did you do? how did you get the modification? how much did it cost? do you have a contact number at Wachovia who won’t deny all knowledge such modification exist?

  72. Congratulations, Sick!! What did they modify you into? Fixed rate (at what interest rate)? Straight COSI variable without the pick-a-payment? Some other index variable?

  73. Thanks guys, I actually received the modification offer about 2 weeks ago. I didn’t want to get ahead of myself and post this info until I saw it reflected on my current statement–it has been recorded and is a done deal. I called the VIP department and faxed the office of the president several times a week for the last 13 months (all the numbers posted here). I finally received a call back from someone in reference to one of the letters faxed to the “office of the president”. Here was my argument: My loan was originally a World COSI loan and had been converted to the Wac. COSI. At the time of the merger we should have received a letter to opt out of the new COSI and go with the CODI. I never received this letter–if I had, I would have asked to be converted to the CODI (proven, stable index and would have lowered my margin). I asked that they “go back” and retroactively convert the loan. The agent told me that this wasn’t possible but informed me that by years end Wells wants all Wachovia pick-a-payment loans modified–especially for customers that made neg-am payments. He offered to “flag” my loan for a modification.

    About a week later I received a call from the modification department, they informed me that my loan was pending approval for a mod. Went thru the steps, phone interview and faxed financial info. 2 weeks later I received a modification offer, I felt like I won the lottery!

    No fees and no prepayment penalty! Offer is valid for 7 days and you must send the first payment in with the agreement. I signed and overnighted the papers!

    I now have a 40 year mortgage. Starting rate 4.39% — .25 point increases annually for the first 6 years and final rate of 6.39% Years 1-6 interest only or P&I — starting year 7 P&I only. I also received a 10% principal reduction!

    Keep in mind my loan is a jumbo and I had been making neg-am or interest only payments for almost 5 years. The principal reduction pretty much wiped out all the deferred interest on my loan.

  74. Dear Sick of Wachovia,
    You give us all hope! If you don’t mind, were you behind in payments or not? The VIP rep told me that only those who were behind could apply for modifications until July. I’d love to fax my complaint to the President, but cannot find the Fax # for the Pres. on this thread (only for the VIP reps). Would you post it?

  75. I’ve received a few email messages after making this post. This should answer most of your questions.

    My loan was current.

    As I mentioned before, I received a call from Wachoiva in responce to several of the letters I sent. There isn’t a specific number to call, they will contact you.

    Fax letters and address them to the “office of the president”. Here’s the number: 210-509-1167.

    This didn’t happen overnight–I spent 13 months dealing with the bank.

    Read the HAMP program guidelines (even though lenders are not required to participate) increased monthly mortgage payments can be considered a financial hardship.

    Because of Neg-Am payments my principle balance was approaching 110% and my monthly payments were going to increase.

  76. These people @ Wachovia make me sick! They told me if I want out of my cosi I have to pay 4,0000 in closing cost.
    I’m a single mom who’s hrs. Were cut and I need to be put in a fixed %. Because I’ve never defaulted
    They said they can’t modifiy me 🙁 I wish our pres. Read what were going through… Like he cares?

    Staten Island, NY

  77. Called Wachovia yesterday, the COSI dropped from 3.51% to 3.43% on July 15th.

    Slowly moving in the right direction.

    Good luck to all.


  78. Whats misleading is Wachovia’s old publication of the CODI. It is presently at 1.893 and they show it at 2.73 (from February of this year).
    I dont think they want to make the difference between the COSI and CODI so obvious. I was fortunate enough to chose the CODI when Wachovia asked me.
    They also lowered my 0.5% to make up the difference in time. My overall rate right now is 4.15%, and I’ve been tracking my decision since Nov 07.
    I’m glad I switched!

    CODI CODI ch COSI Cosi ch Margin True Rate Potential Rate

    November 1, 2007 5.323 -0.020 4.9 0.110 2.257 7.580 7.7
    December 1, 2007 5.293 -0.050 4.85 0.060 2.257 7.550 7.65
    January 1, 2008 5.268 -0.075 4.79 0.000 2.257 7.525 7.59
    February 1, 2008 5.145 -0.198 4.74 -0.050 2.257 7.402 7.54
    March 1, 2008 4.958 -0.385 4.65 -0.140 2.257 7.215 7.45
    April 1, 2008 4.748 -0.595 4.43 -0.360 2.257 7.005 7.23
    May 1, 2008 4.543 -0.800 4.19 -0.600 2.257 6.800 6.99
    June 1, 2008 4.323 -1.020 3.91 -0.880 2.257 6.580 6.71
    July 1, 2008 4.108 -1.235 3.74 -1.050 2.257 6.365 6.54
    August 1, 2008 3.898 -1.445 3.77 -1.020 2.257 6.155 6.57
    September 1, 2008 3.673 -1.670 3.73 -1.060 2.257 5.930 6.53
    October 1, 2008 3.517 -1.826 3.74 -1.050 2.257 5.774 6.54
    November 1, 2008 3.453 -1.890 3.76 -1.030 2.257 5.710 6.56
    December 1, 2008 3.236 -2.107 3.78 -1.010 2.257 5.493 6.58
    January 1, 2009 2.965 -2.378 3.76 -1.030 2.257 5.222 6.56
    February 1, 2009 2.73 -2.613 3.69 -1.100 2.257 4.987 6.49
    March 1, 2009 2.572 -2.771 3.6 -1.190 2.257 4.829 6.4
    April 1, 2009 2.428 -2.915 3.6 -1.190 2.257 4.685 6.4
    May 1, 2009 2.265 -3.078 3.55 -1.240 2.257 4.522 6.35
    June 1, 2009 2.091 -3.252 3.51 -1.280 2.257 4.348 6.31
    July 1, 2009 1.893 -3.450 3.43 -1.360 2.257 4.150 6.23

  79. Paul,

    Thank you for posting and congratulations on escaping COSI. Are a single-family loan or a multi-family?

    Good luck to all,


  80. 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.

  81. 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.

  82. 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.

  83. 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.

    john e.

  84. 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!

  85. 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 …

  86. 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.

  87. 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,


  88. 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.

  89. 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,


  90. 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.

  91. 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……………….

  92. 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,


  93. 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

  94. 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.

  95. 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:


    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,


  96. 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).

  97. 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.

  98. 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


  99. 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.

  100. 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.

  101. 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.

  102. 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).

  103. 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

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  105. 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).

  106. Now that Libor has been exposed as manipulated by various banks; it is not a stretch to believe that Wells Fargo has been less than accurate with cosi. Wells has now controlled cosi with no apparent oversight since 2009. Even though they refer to a “weighted” avg of the various cd’s there is no apparent connection between the cd rares and cosi. Cosi is still nearly 2%; although Wells has had no accounts even near 2% in the last 3 years. On the contrary the vast majority of rates are under .1%. How much in high yield deposits would it take to raise .1% to an avg of nearly 2.0%. If the Libor has been fixed by a conspiracy of banks with no oversight, and Congress is now just investigating years later; Wells is probably just balancing the risks of substantial unsupported cosi profits versus a long shot of getting caught. Has anyone reported this or know of any law suits. I would suggest everyone read the editorial in the Los Angeles Times on 7/22/12 cautioning against these indexes that are not created by an independently and subject to verification.

    • As of 6/30/14, Wells Fargo reported to its shareholders that it paid an avg. .14% on its interest bearing accounts. The COSI for 6/30/14 was .90%. There is no explanation for such a large difference. Has anyone been able to determine what data and adjustments are used by Wells? How are the rates weighted?


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