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.

 
This post has been included in Arizona Real Estate News
Post is included in group: Activerain MLS Online
Post is included in group: Active Rain Newbies
Post is included in group: ActiveRain Rockstars
Post is included in group: Keller Williams 'Rainers
Post is included in group: Metro Phoenix Active Rainers

10 Comments on Wells Fargo does what?

FEB
27
2011
1 Featured Post Called Shot Master

Wow- Thanks for sharing this. I can't believe I had not already heard of this from one of my mortgage brokers.
12:37am • #1
654,419 Points 56 Featured Posts Outside Blog Called Shot Master

wow...that is amazing...is this not the same situation that got us into trouble in the first place?
12:39am • #2
1,113,250 Points 101 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

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.
12:43am • #3
359,311 Points 76 Featured Posts Outside Blog Called Shot Master

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?
12:59am • #4

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.
1:03am • #5
793,352 Points 5 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Thanks for sharing this important piece of info.
1:03am • #6
250,108 Points Attended Rain Camp

That could be some good new to help stimulate the market a bit.
1:39am • #7
465,900 Points 50 Featured Posts Called Shot Master

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.
2:11am • #13
229,869 Points 9 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

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.
2:55am • #14
169,005 Points Attended Rain Camp

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.
8:39am • #15


What does the graphic say?
Leave a response…

(optional)
Spam Prevention: