The U.S. credit crisis deepened today as Wachovia Corp reported a $1.1 billion loss on subprime mortgage-related debt in October, while Capital One Financial Corp said more customers are missing payments. Earlier in the subprime debacle we reported that people were trying to stay current on their credit cards even if they were having problems making their house payments. That is no longer the case. What got Wachovia into this mess in the first place?

Wachovia paid $24.2 billion last year for Golden West Financial Corp, a big California mortgage lender. Wachovia, the fourth-largest U.S. bank said the value of so-called asset-backed collateralized debt obligations (CDOs) it holds 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 $347 million in the third quarter, Wachovia said.

Jonathan Stempel of Reuters wrote a great article about Capital One and Wachovia. You can see it here.