Residents Prepare For Rough Times As Wall Street Stumbles

Orange Transcript / LocalSource.com — Thursday, October 2, 2008


It was business as usual Monday morning at the Wachovia bank branch on Baker Street in Maplewood, as Bette Leverty walked out with money in hand.

Only hours earlier, the world learned Wachovia became the latest casualty of the financial crisis, as Citigroup agreed to buy its banking operations for $2.1 billion.

"You wonder what's going to happen next," said Lloyd Brown outside the bank Monday.

"I'm glad I'm not starting out, that's all 1 have to say," said Leverty, 72.

The national financial crisis during the past week will affect customers of two major banks in Essex County, as new names may appear on the front doors in the future.

The branch offices of Washington Mutual and Wachovia were sold for an estimated $4 billion combined, after the banks experienced serious financial problems. Shares of both companies declined dramatically last week after concerns were issued about both banks' credit liability exposure.

Wachovia shares lost approximately 47 percent of their value last week, while Washington Mutual stock value fell by 60 percent.

Wachovia, which assumed area branches of First Union when the companies merged in 2001, has one branch each in Glen Ridge, West Orange, Maplewood, Bloom field and Nutley. It has two branches apiece in Irvington, East Orange and South Orange and 10 offices in Newark.

A spokeswoman for Wachovia in its Charlotte, N.C, corporate office said the company had no comment and officials would not enter into interviews Monday.

Washington Mutual, a Seattle-based bank, has one office each in Orange, West Orange, South Orange, Maplewood and Nutley. It has three branches in Bloomfield.

Washington Mutual, which has a branch along Main Street in Orange, was seized by the federal government and later sold to J.P. Morgan Chase & Co. Inc. for $1.9 billion.

During the past year, Wachovia shares lost 80 percent of its value while Washington Mutual lost 95 percent.

Bill Waters, who walked out of the Maplewood Washington Mutual in the morning, stood on the sidewalk talking about the financial crisis. "I was very concerned about Washington Mutual," he said.

Essex County is trending toward 6,000 property foreclosures this year, double the total from 2007, said E. Michael Taylor, director of the county Division of Housing and Community Development.

Taylor said that, in Essex County suburbs, foreclosures tend to be clustered along the urban or easternmost border. The county, with the help of graduate students from Rutgers University, has tracked court filings by bank and mortgage companies that intend to start foreclosure proceedings. In turn, the county has shared that information with municipalities.

At a meeting in August with the county, Maplewood officials learned 75 properties were in pre-foreclosure stage, a figure that likely has grown since then.

Those 75 cases, mostly located along the eastern edge of the township, bordering Newark and Irvington, represented property owners who had missed their mortgage payment for at least three months in a row.

Overall, the number is low and Maplewood is in good shape, Taylor said.

Vice Mayor Vic DeLuca said Tuesday he and other officials went door-to-door to homes on the list to invite residents to a foreclosure-prevention workshop planned for Saturday.

"We wanted to take action for people in pre-foreclosure stage to get some help," he said.

In canvassing the town, DeLuca said he found homes already vacant or "For Sale" signs posted. He also said he found renters, people who have been paying their rent but will find themselves without a place to stay.

New Jersey Citizen Action, a liberal-leaning activist group, is cosponsoring the workshop Saturday. Counselors will attend and mortgage and legal experts will answer questions.

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