Wells Fargo has expanded its eligibility criteria for current bank customers seeking to refinance a nonconforming mortgage. At the same time, it has tightened those guidelines for borrowers who did not have a prior relationship with the bank.
The changes went into effect July 1, said Wells Fargo spokesman Tom Goyda. They “substantially increased the number of borrowers from which we’ll accept applications for nonconforming refinances,” he said, “as those eligible to apply now include all current Wells Fargo mortgage and home equity line of credit customers, as well as customers with any amount of assets in qualifying Wells Fargo deposit, brokerage and wealth and investment management accounts.”
In early April, just as the spread of the coronavirus began to impact the U.S. economy, Wells Fargo limited nonconforming refinancings to only its customers who had $250,000 or more in assets under management with Wells Fargo for 30 or more days before making the application.
Under the latest changes, potential borrowers without an existing Wells Fargo relationship can now apply for a nonconforming refinance if they transfer $1 million or more in assets to a qualifying deposit, brokerage or investment account, Goyda said. Before the pandemic, Wells Fargo had no minimum requirements at all, he added.
He added that “customers without an existing Wells Fargo relationship may be eligible for other mortgage loan products, even if they do not transfer funds into a qualifying deposit, brokerage or investment account.”
In the past few months, all lenders have reduced jumbo mortgage product availability due to the pandemic. The jumbo component of the Mortgage Bankers Association’s Mortgage Credit Availability Index fell 7.3% in June, following declines of 4.4% in May, 22.9% in April and 36.9% in March.
Jumbo product availability overall has fallen 57% since the pandemic began, Joel Kan, the MBA’s associate vice president of industry and economic forecasting, said in the latest MCAI release.
Refinancings, no matter the product type, made up 60% of applications received for the week ended July 3, the MBA said. Interest rates for jumbo loans were 3.52%.
Wells Fargo has not backed away from the nonconforming purchase market, as it has continued to originate these loans “for all eligible borrowers in accordance with our existing guidelines through our retail channel,” Goyda said.
In the first quarter, Wells Fargo had $48 million of total mortgage originations, with 52% of its volume coming from refinancings.