In an email communication from my wholesale representative it appears that Wells Fargo is eliminating stated income immediately on its home equity programs and is seriously considering eliminating “borrower selected” stated income from its product mix. It appears that stated income may be still available based on risk grading via the automated underwriting engine; but otherwise will not be an option to borrowers. The email also mentions that non-conforming ARM loans are not performing well and that pricing should worsen signficantly on those products in the near future.
While I know some of you don’t care what Wells Fargo does (Russ) I think it’s important to track the evolution of the major banks and their lending criteria as veritable ‘canaries in the coal mine.’ What they do will inevitably where the bulk of the market will head.
Read it for yourself here:
The decision has been made to stop originating borrower selected SIVA [for equity products]. A Newsflash and an Iland are in the process of being prepared and will most likely be distributed on Friday. The effective date will be applications received on or after Tuesday, November 20th. For standalones, any SIVA applications will need to be received by end of day Monday, November 19th. For WF Simo’s, any SIVA applications will need to be in A15 status by end of day Monday, November 19th.
All existing pipeline will be honored based upon the applicable dates on the commitment letters
Nonconforming ARMS not executing well so we will see pricing hits and changes soon.
All “special doc type” loans are being looked at hard! Conforming as well ( yep, that sounds like Mtg. Express)
Bottom line is- lock your loans if you like what we have today because it may be gone tomorrow!!
The industry in general is moving back to late 80’s early 90’s. Full Doc Loans. Please look at your borrowers that will need a loan do to resets that have to go SIVA. We may be loosing that documentation option soon on our Conforming and Non-Conforming. All the more reason to use Direct Express and let the engine give you SIVA or SISA approval.
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