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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Rainer
56,085
Tommy Taylor
Taylor Properties & TexasForSale.net - Kerrville, TX
CNE- Texas Hill Country Realtor

Wow- Thanks for sharing this. I can't believe I had not already heard of this from one of my mortgage brokers.

Feb 27, 2011 12:37 AM #1
Rainmaker
836,884
Jeffrey DiMuria 321.223.6253 www.SpaceCoastHomesNow.com
Fontaine Property Group - Melbourne, FL
Your Space Coast Real Estate Expert!

wow...that is amazing...is this not the same situation that got us into trouble in the first place?

Feb 27, 2011 12:39 AM #2
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Tammy Lankford
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Your Lake Sinclair Expert (706-485-9668)

You know I read about this on AR a couple of days ago when someone else commented they'd seen it.  I called my local WF guy and he said nope, nada, nu-uh that it's 600 minimum.  So if it has happened somewhere it hasn't filtered down to my LO yet.

Feb 27, 2011 12:43 AM #3
Rainmaker
392,274
Tni LeBlanc
Mint Properties, Tni LeBlanc (805) 878-9879 - Santa Maria, CA
JD, MA, REALTOR, CalBRE # 01871795

Not sure if this is a great move or not.  Why not get the buyers back in who have perfect credit except for a short sale before folks with marginal credit histories?  Isn't this how we got in this mess?

Feb 27, 2011 12:59 AM #4
Rainer
51,467
Michael C. Price
Real Estate One - Ann Arbor, MI
Ann Arbor-Real Estate Strategist

Many lenders have very weak marketing to their referral partners. There are many resources in the to market these types of programs but most do not use them.

Feb 27, 2011 01:03 AM #5
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Michelle Carr-Crowe-Selling Silicon Valley Homes in Top Schools San Jose, Cupertino, Saratoga, Palo Alto-Just Call 408-252-8900
Just Call (408) 252-8900! - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

Thanks for sharing this important piece of info.

Feb 27, 2011 01:03 AM #6
Rainer
285,627
Jay Schmitt
Coldwell Banker Select Professionals - Gettysburg, PA
Gettysburg Real Estate Agent

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

Feb 27, 2011 01:39 AM #7
Rainmaker
689,468
Pamela Seley, REALTOR®
REALTY EXECUTIVES OTF - Temecula, CA
Seals the Deals in Temecula Valley California

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.

Feb 27, 2011 02:11 AM #13
Rainer
234,262
Doug Bullwinkel
Vitek Mortgage Group - Roseville, CA
NMLS #281609

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.

Feb 27, 2011 02:55 AM #14
Rainmaker
221,974
Linda De Fusco
The De Fusco TEAM Keller Williams Arizona Realty - Scottsdale, AZ
The Arizona Rainmaker

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.

Feb 27, 2011 08:39 AM #15
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Linda De Fusco

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