Wells Fargo’s decision to make FHA loans to borrowers with FICO scores all the way down to 600 — quite a bit below the previous 642 threshold — has executives with Realogy and Home Depot cheering, MarketWatch’s Steve Goldstein reports.
“That’s not to say we’re back in the heady days of 2006 or 2007,” Goldstein says — Wells Fargo is still requiring that borrowers provide documentation to show they’re capable of repaying the loans, and the Federal Reserve’s senior loan officer survey still shows “a pretty tight environment for home loans even as other loans are being aggressively made.”
Last month Bloomberg News reported that Wells Fargo was training a team of about 400 underwriters who will make loans that don’t follow the new “qualified mortgage” guidelines for loans that are destined to be securitized and sold to investors. A Wells Fargo executive said the “nonqualified” mortgages, which the company will keep on its books, could eventually amount to 5 percent of the bank’s originations. Source: marketwatch.com.
