Wells Fargo Pulls The Rug On New FHA Streamline Refinance Mortgages

By
Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut NMLS #65149

The new FHA Guidelines for Streamline Refinancing FHA Insured Mortgages, which had endorsed FHA Case Numbers prior to June 1, 2009, had no sooner gone into affect last week than Well Fargo pulled the pug on accepting applications for them unless they were already servicing the loan.  This came as a major blow especially to brokers, wholesalers, and correspondent lenders.

Luckily for us at McCue Mortgage it did not have much impact on us, because we have other investors that are more than happy to service new FHA Streamline Refinance Mortgages.  Never the less this was a pretty cheap shot by Wells Fargo, and I am sure it will be one that will at some point come back to bit them in the donkey.

These past two week have be among some of the highest volume weeks that we have had since I have been with McCue Mortgage.  We have seem more than double the volume of what would be considered a very good week, and it is all attributed to the new FHA Streamline Refinance Guidelines.

Anyone who has an FHA Insured Mortgage that has a Case Number that received endorsement prior to June 1, 2009 should seriously consider refinancing.  FHA interest rates prior to June 1, 2009 were at least 5.25% and higher, so each of these loan can see a monthly savings of $130 plus dollars per about $100,000.  That is serious savings for most of the homeowners that can qualify for this program.

It was reported that so far more than 126,000 homeowners have than advantage of the new FHA Streamline Refinance Guidelines, and there are thousands more that will be taking advantage of these new guideline in the coming weeks.  If you have a FHA Insured Mortgage that received endorsement prior to June 1, 2009, act now before FHA pulls a cheap stunt like Wells Fargo, and pulls the rug out from under you, by changing the  rules again.  Don't be one of the ones that will later say, I should have done it but didn't.

 

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 Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 orgsouto@mccuemortgage.com

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Topic:
Mortgage / Finance
Location:
Connecticut
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Real Estate Rookie
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fha streamline refinance

Comments 27 New Comment

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Ambassador
1,645,565
Richard Weisser
Richard Weisser Coweta Newnan Homes for Sale
Better Homes and Gardens Real Estate Metro Brokers

George...

There has to be more to this than meets the eye ... perhaps WF is just overwhelmed at this point?

June 23, 2012 04:07 AM
Rainmaker
172,030
MaryBeth Mills Muldowney
Massachusetts Broker Owner
TradeWinds Realty Group LLC

Wow it appears that other banks will be getting a share of the business that was there for the taking with WF.  There is no rhym or reason to what is going on in the economy.  thank you for the timely update.

June 23, 2012 05:44 AM
Ambassador
492,149
Brian Schulman
Lancaster County PA RealEstate Expert 717-951-5552
Coldwell Banker Select Professionals, Lancaster PA

I think in any case, people wanting to refi with any program should take advantage of the historically low interest rates.  They definitely won't stay low - hyperinflation is coming in the long term.

June 23, 2012 06:07 AM
Rainmaker
891,596
Michael Setunsky
Your Commercial Real Estate Link to Northern VA
Michael's Commercial LLC

George for whatever reason Wells Fargo dropped the program, it is to your advantage. It will interesting to see what the major banks do because their credit rating was reduced.

June 23, 2012 06:10 AM
Rainmaker
1,201,843
Richie Alan Naggar Author PEARLS SERIES of books
on LIFE and LOVE plus Real Estate too!
People first then business! Ran Right Realty Riverside, Ca

I am anti-bank....so I have no trouble jumping in on any bank bash...What was once a noble institution has been outed

June 23, 2012 06:32 AM
Rainer
277,079
Steven Cook
- Pierce, King, Kitsap, Thurston, Mason Counties
No Longer Processing Mortgages.

George -- thanks for the update!  As one of the previous folks commented,WF may just be overwhelmed, as we are hearing of nearly three weeks for initial processing timeline.  

June 23, 2012 07:05 AM
Rainmaker
545,869
Gary Frimann
California Broker and REALTOR
Eagle Ridge Realty / Signature Homes & Estates

I think this is a great program.  Wells did it to Brokers and correspondent lenders, but will still handle their own loans that they have on the books.  I'm not sure that is a smart move on Wells' part.

June 23, 2012 07:35 AM
Rainmaker
313,510
Sandy Acevedo
RE/MAX Masters, Inland Empire Homes for Sale
951-290-8588

HI George, this is good information to know. I asked a seller if they had an FHA loan and they didn't know. Is there an easy way to tell if they do?

June 23, 2012 08:03 AM
Ambassador
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George Souto
Your Connecticut Mortgage Expert
George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut

Gary thank you for your comment, and highlighting what I stated early in my blog that Wells Fargo would be doing FHA Streamlines for the loans that they are currently servicing.  Therefore, lenders that are currently doing business with Wells Fargo can Refi those loans and sell them back to Wells.  I should of made that clearer in the blog, so thank you for bring it up in your comment.

Having said that, Wells is such a major purchaser of mortgages, that this is going to leave a lot of lenders, and especially Wholesalers, and Correspondent Lenders scrambling for an investor to sell them to, and that is not a good position to be in.

June 23, 2012 08:09 AM
Rainmaker
248,076
Rob Spinosa
Marin Mortgage Broker
RPM Mortgage, Marin County, CA

I'm seeing the whole industry go this way.  This had "too good to be true" written all over it, and sure enough, the individual banks moved the goal posts.  There is a precedent for this (many actually) and I can't say I'm surprised.

June 23, 2012 08:11 AM
Ambassador
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George Souto
Your Connecticut Mortgage Expert
George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut

Sandy, If they look at their "Note" at the top right hand corner there should be a FHA Case Number if it is FHA Insured.  They will still have to have a Lender check the Case Number to make sure that it was endorced prior to June 1, 2009, but it is a good initial indication of whether they will qualify or not.

June 23, 2012 08:11 AM
Rainmaker
483,514
Jordon Wheeler
J W Group Real Estate Sales and Service
The Jordon Wheeler Group

Hey George,

Congrats on the feature and bringing this information to us.  Like Rob, I also read that other big players went the way of Wells Fargo by only processing loans they already service.  Is there a timeline for borrowers to take advantage of the FHA Streamline Refi?

Best of success to you this year!

June 23, 2012 09:47 AM
Ambassador
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George Souto
Your Connecticut Mortgage Expert
George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut

Jordon, no there is not timeline, but we all know how things can quickly change especially if FHA starts to get more people refinancing than what they might have anticipated when they rolled this program out.  The safe thing is to do it now and not wait.

June 23, 2012 10:03 AM
Rainmaker
570,044
Bill Gillhespy
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos
16 Sunview Blvd

Hi George,  Not surprised to see the big lenders sorting through the program to cherry pick the loans they wish to work with.

June 23, 2012 10:43 AM
Rainmaker
716,974
Debbie Walsh
Hudson Valley NY Real Estate 845.928.8000
Keller Williams Realty

Wow surprised to hear this  - I am in a deal with a client for an FHA loan that was through Wells and she said that they were not getting back to her like they were before and she was feeling very nervous so she had switched to another bank alittle over a week ago.  Looks like she made a good move.  Thanks for always keeping us up to date George!

June 23, 2012 11:44 AM
Rainer
195,331
Beth Paterson
NMLS #342859
Reverse Mortgages SIDAC, NMLS #173899

George, I'm thinking Wells may just be too big but at some point I think it will catch up with them.  Good thing you have other lenders/investors to help your clients... the advantage of being a broker and having more than one option of lenders.

 

June 23, 2012 01:01 PM
Rainmaker
973,701
Sharon Alters
Your Fleming Island Relocation Agents.
Coldwell Banker Vanguard Realty

George, thanks for keeping all of us current. I guess they weren't making enough money on these loans???

Sharon

June 23, 2012 05:41 PM
Ambassador
2,365,959
Patricia Kennedy
For Your Home in the Capital
Evers & Company Real Estate, Inc.

George, this post illustrates why I send my clients to, well, not the big banks.

June 23, 2012 06:25 PM
Rainmaker
1,033,426
Joan Whitebook
Consumer Focused Real Estate Services
BHG The Masiello Group

-George -- what great news for McCue.. Glad that you are able to continue to work with those who want to take advantage of the FHA 203K program!  "These past two week have be among some of the highest volume weeks that we have had since I have been with McCue Mortgage.  We have seem more than double the volume of what would be considered a very good week, and it is all attributed to the new FHA Streamline Refinance Guidelines."

June 23, 2012 06:31 PM
Ambassador
1,550,626
Christine Donovan
Broker/Attorney 800-610-7253 DRE01267479 - Costa M
Donovan Blatt Realty
George - This is a change midstream for Wells Fargo. It's a good thing there are other options.
June 23, 2012 08:23 PM
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George Souto

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