Wells Fargo does what?

By
Real Estate Agent with The De Fusco TEAM Keller Williams Arizona Realty

 

Realtor Magazine says...

Wells Fargo Says Credit Score of 500 OK

In a long-awaited shift, Wells Fargo is providing FHA mortgages to borrowers with credit scores as low as 500. The move comes after the National Association of Realtors® and FHA Commissioner David Stevens, among others late last year, criticized the country's major banks for requiring credit scores as high as 650 in some cases before making loans. At NAR's annual conference last year in New Orleans, Stevens said banks' credit policies were out of sync with the FHA and artificially restraining home sales by as much as 20 percent. Under its new policy, Wells Fargo will accept borrowers with credit scores of 500 to 579 if those borrowers can make a down payment of at least 10 percent; gifted funds or other down payment assistance is not allowed. For borrowers with credit scores of 580 to 599, borrowers must put down 5 percent, with the same restriction on gifts and assistance funds. Borrowers with credit scores of 600 or higher can make a 3.5 percent down payment. The new policy took effect Jan. 15.

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Michelle Carr-Crowe Just Call 408-252-8900 Luxury Homes in Top Silicon Valley Schools-San Jose, Cupertino, Saratoga & Palo Alto
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Thanks for sharing this important piece of info.

February 27, 2011 01:03 AM
Rainer
278,245
Jay Schmitt
Gettysburg Real Estate Agent
Prudential Bob Yost-Sites Homesale

That could be some good new to help stimulate the market a bit.

February 27, 2011 01:39 AM
Rainmaker
606,132
Pamela Seley, REALTOR®
Menifee Lakes California Real Estate
REALTY EXECUTIVES OTF

Linda, I think Wells Fargo will be dominating the mortgage market. They know what they are doing.  If they don't lower the standards, there won't be any qualified buyers to buy short sales and foreclosures.

February 27, 2011 02:11 AM
Rainer
234,162
Doug Bullwinkel
NMLS #281609
Vitek Mortgage Group

Wells Fargo has this available through their retail channel only.  They probably forgot to mention the overlays  that come with this.  Much higher rates and fees attached.  It's great to have these additional options available to borrowers with low  credit scores.  As agents we all  need to be responsible and not put people into homes that they shouldn't purchase.  There is a reason for someone having a 500 credit score.  This has been tried before with 20% to 25% down payments.  Remember the "sub-prime" loans of the recent past?  Buyers are upside down on day one with an FHA loan so complicating the problem with bad credit is not the best combination.

February 27, 2011 02:55 AM
Rainmaker
207,074
Linda De Fusco
The Arizona Rainmaker
The De Fusco TEAM Keller Williams Arizona Realty

I was just a little surprised that this was not marketed to the Realtor or consumer. The two MB I work with haven't mentioned it at all.

February 27, 2011 08:39 AM
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Rainmaker
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Linda De Fusco

The Arizona Rainmaker
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