Condos at The Grove

The Grove still has 5 units for sale that have been sitting on the market for months. To get these elegant condos sold we see they are now offering a new deal on the availability page of the official website:

ONLY 5 Homes LEFT!
CLOSE OUT INCENTIVES
2.75% First Year Interest Rate

Doesn't that sound an awful lot like the Option-ARMs that got us into this mess?

Ironically, the preferred lender for The Grove is Wells Fargo who recently acquired more than $120 billion of Option-ARM loans when they purchased Wachovia.

There's more... if you click through to The Grove's preferred lender page you’ll see this list as of January 14th:

Why use our Preferred Lender?
1. Free Appraisal.
2. Free Credit Report.
3. 30 minute loan approvals on the site.
4. Long term rate lock in with roll down feature if rates get better.
5. Familiarity with The Grove and constant communication with Sales Staff.
6. Security of dealing with the only U.S. bank to have the highest-possible credit rating from both Standard & Poor’s (AAA) and Moody’s (AA+).
7. Rate discounts for existing & new Wells Fargo customers.
8. Ease in obtaining future credit lines.
9. Extensive portfolio of loan products.

Take a look at #6. That's their emphasis, not mine, on “the only U.S. bank” with top credit ratings.

One problem. Wells Fargo was downgraded by S&P on December 19th and by Moody’s on January 6th.

The reason? You guessed it:

Moody's Investors Service on Tuesday downgraded ratings on Wells Fargo and Co. on concerns that the bank's acquisition of Wachovia Corp has undermined its credit quality as it takes on the additional risk of Wachovia's loan book.

Moody's cut Wells Fargo's senior debt ratings by two notches to "Aa3," or the fourth-highest investment grade, and said the outlook is negative, meaning it could lower the rating again within the next two years...

...Wells Fargo has already said it will write down $71.4 billion of Wachovia's $482.4 billion loan portfolio, including $36 billion of option adjustable rate mortgages...

Lastly, it is worth noting that one of The Grove condos is now a rental going for $2,650 a month. This is starting to look like a trend.