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Are mortgage lending standards easing?

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Mortgage Professional America | 17 Feb 2014, 06:36 AM Agree 0
Could mortgage lending standards finally be starting to ease? Wells Fargo seems to think so. The big bank has announced that it will lower its minimum credit score for certain government-backed mortgages
  • 2bsquare | | 17 Feb 2014, 11:18 AM Agree 0
    Hang on, yes you can now go down to lower FICO scores, however the LLPA are so harsh that it is putting the borrowers into excessive DTI areas.

    The worst is not the LTV restrictions, but other areas, ie. Having 6 months reserves a on 2 family refi. Why? If its o/o it should be treated as so. Had on in NYC that didn't qualify, 400k on a 4M value. Never missed a payment.
  • Gary J. Heinecke | | 17 Feb 2014, 11:23 AM Agree 0
    If you want true competition and not just the back room deals for the banks and politicians than maybe they should consider putting banks and brokers on the same playing field. The brokers will kill them with personal service. TBTF should be 2 big to JAIL!!
  • Joe Parsons | | 17 Feb 2014, 11:48 AM Agree 0
    @2bsquare: even after the LLPAs, there will still be max DTIs. The net effect is that the low-FICO borrower will qualify for a smaller mortgage than a more creditworthy borrower. Frankly, someone with a 600 (or lower) FICO arguably does not have control of their finances; they would have to show some combination of high credit card balances, collections, judgments and delinquencies to have that score. I don't think we're doing anyone a service by getting them a mortgage when they are in that condition.
  • MD | | 17 Feb 2014, 01:12 PM Agree 0
    I wonder why Wells Fargo lowered their minimum fico on FHA from 640 to 600? Would it be anything to do with the fact that their production was 40% of what it was last December 2013?

    This will be the playbook for 2014...As rates rise, banks will have less mortgages to make profits on, so banks will loosen standards to capture more mortgages.
  • Gary J. Heinecke | | 17 Feb 2014, 01:43 PM Agree 0
    They tried to eliminate the broker by violating the Sherman - Anti trust laws and working behind the scenes with the Gov't and fact is the broker still has a place. No question their production is worse, the quality of mortgage officers questionable. When you are responsible for more than 20% of the paper bought than it is no doubt the gold standard "he who has the gold makes the rules".
  • Wm Matz | | 17 Feb 2014, 02:26 PM Agree 0
    So Wells will try to cheat more veterans by charging 4.5% for VA vs. the 3.75% brokers can offer. Yes, we need a level playing field.
  • Gary J. Heinecke | | 17 Feb 2014, 02:49 PM Agree 0
    I seem to remember WELLS PULLING OUT OF WHOLESALE BECAUSE OF THE EXPOSURE WHEN IN REALITY BETWEEN RE-MOVING WHOLESALE CONDUITS and trying to "control the market". Their true intention was to eliminate competition through politics. I said it before and will say it again. They have all violated the Sherman ANTI-TRUST LAWS.
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