Wells Fargo has expanded its eligibility criteria for current bank customers who want to refinance a bad mortgage. At the same time, the guidelines for borrowers who previously had no relationship with the bank were tightened.
The changes came into effect on July 1, said Tom Goyda, Wells Fargo spokesman, and "significantly increased the number of borrowers from whom we will accept incorrect refinancing applications, as those eligible to apply now all current Wells Fargo mortgages and homes include credit line customers, as well as clients of any wealth, in qualified Wells Fargo deposit, brokerage, and wealth and investment management accounts. "
As early as April, when the spread of the corona virus affected the U.S. economy, Wells Fargo limited erroneous refinancing only to clients who had managed $ 250,000 or more in Wells Fargo assets for 30 days or more prior to filing the application.
As part of the recent changes, prospective borrowers without an existing Wells Fargo relationship can now request incorrect refinancing when they transfer assets of at least $ 1 million to a qualified deposit, brokerage, or investment account, Goyda said. Before the pandemic, Wells Fargo had no minimum requirements at all, he added.
He added that "customers without an existing Wells Fargo relationship may be eligible for other mortgage loan products even if they do not transfer money to a qualified deposit, brokerage, or investment account."
In the past few months, all lenders have reduced the availability of jumbo mortgage products due to the pandemic. The mortgage component of the Mortgage Bankers Association's mortgage credit availability index fell 7.3% in June after declining 4.4% in May, 22.9% in April and 36.9% in March.
The availability of jumbo products has decreased overall by 57% since the pandemic began, said Joel Kan, deputy vice president of industry and economic forecasting for the MBA, in the latest version of MCAI.
Refinancing, regardless of product type, accounted for 60% of applications for the week ending July 3, the MBA said. The interest rates for jumbo loans were 3.52%.
Wells Fargo has not pulled out of the defective buying market as it continues to borrow "for all eligible borrowers under our existing retail channel guidelines," said Goyda.
In the first quarter, Wells Fargo had a total mortgage origin of $ 48 million, with 52% of its volume coming from refinancing.