Wells Fargo Announces End to 100% Financed Loans.
It would appear that Wells Fargo is doing its best, albeit a bit late, to get out of the prime lending market.
BlownMortgage reports:
“Wells Fargo will announce the elimination of 100% financing for all credit grades, loan sizes and document types shortly. This move acknowledges the recent downturn in the housing market and the lack of investor confidence in the US housing market. “
Apparently they’re scrapping every one of their 100% financed loans with the exception of ones known as 80-20 loans in which a bank typically reduces its risks by requiring another bank loan 20% of the mortgage total. Upon contacting Wells Fargo, it would appear that they will also continue to fund certain low down payment loans backed by government programs as well.
With lending standards continuing to get more and more strict, it seems likely that other lenders will soon follow suit in eliminating such 100% financed loans. This appears reasonable, as a loan with no down payment is an extremely risky loan to make.
Homeowners struggling to afford another home, or get a loan may wish to explore a home equity line of credit as a method of affording part of a home’s price.
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