Posted on 08/06/2007 8:29:30 AM PDT by Hydroshock
“They’re pulling themselves out of the market to regroup,” is what one of my mortgage broker buddies told me on the phone this morning when I asked how in the heck Wells Fargo Wells Fargo & CoWFC could raise rates on a 30-year jumbo fixed rate mortgage from 6 7/8% to 8% overnight. A jumbo is anything over $417,000, and given today’s home prices, that’s going to hit an awful lot of borrowers.
So, since Bank of America Bank of America CorpBAC and others are still at the old rate, no borrower in their right mind would go to Wells Fargo. My buddy says no biggee, Wells Fargo can afford to shut down its mortgage division for a while until all this shakes out. Well, I think it’s a biggee.
Then he tells me he got an email this morning from Vertice, which is part of Wachovia, Wachovia CorpWB 45.49 0.55 +1.22%
ping
http://www.youtube.com/watch?v=SWksEJQEYVU
I was talking about this over the weekend with my brother-in-law who is in the mortgage business. We agreed that something weird is going on at Wells Fargo. They have been the #1 or #2 mortgage originator for the last 5 years and suddenly they are for all intents and purposes pulling out of the market. Wells Fargo is the only financial institution in America other than Fannie Mae and Freddie Mac whose bonds carry a AAA rating. This makes no sense unless Wells is getting ready to sell to someone or close down. Or they have a serious OCC examination going on that has found a whole lot of bad stuff.
Great, they hold our mortgage. At least I don’t have a jumbo. Wonder what’s next?
ping
Ditto,
I originally got it through someone else but wells fargo picked them up, like you its not a jumbo
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Fannie Mae and Freddie Mac are NOT direct lenders.
...and ditto for me. Wells Fargo Home Mortgage (WFHM) picked up my mortgage just a little over a year ago.
What a great company.
Perhaps on the coasts, but for most of America, $500,000 will still buy you a lot of house.
A few years ago some local heavy hitting mortgage writers left Wells and went to B of A and other institutions. Recently most of those who went to B of A have gone to other mortgage companies.
None of these Mortgage guys have talked about Wells besides remarks of too lenient credit to people who shouldn’t have qualified.
Wells has a long history of weird reactions like this. In the late 70’s, we moved to our current city. We had a great loan with Wells in the old city and supposedly had a pre approval for the new home with a very sizeable down payment of over 50%. I had an excellent and well paying job with the same company for over a decade, and we had no debt beside our mortgage. Credit cards were paid off each month before the due dates.
A week before we closed on the new home, our real estate agent got a heads up and told us, we needed to check on our loan app. with Wells. Suddenly a loan with good customers with a sizeable down payment wasn’t even in the works. The loan guy and bank manager acted like mafia members testifying in congress when my wife and I asked them questions about what happened.
Fortunately, we went to Security Pacific, where we had our first California Home loan and got a loan approved in about 3 days for our new home at a good rate during the early Carter days.
We cancelled our Wells checking and savings accts and transferred the funds to Sec Pac, which we stayed with until they were bought out.
When Sec Pac started changing hands, Wells offered us a good deal on the primary loan and an excellent no cost line of credit until we wrote a check. We went to them for that loan with basically no loan costs.
A few years later, interest rates were coming down, and Wells refused to help us change. They closed the branch down where we had our loans. The local bank manager was fired, and she suggested that we take our good credit and go to GMAC for a new home loan. We went to GMAC and got a good rate in 24 hours and the same deal on the line of credit, and we left Wells. A few years ago we refied with DyTech to cover the costs or a lot of redoing our 36 year old home and got an even better rate and a similiar line of credit deal. Our loan was approved before the day was over, and we closed for free in our home one week after we had applied. We were contacted by Wells during this process. They were pushing a high rate justifying it because they were local. I hung up on them.
If they sell your mortgage to someone else, you should consider going to DiTech or another loan company.
The draw of a fixed rate mortgage is thinking that they can’t do things like this to you...
Is there no way to protect yourself?
You are posting misinformation. You are evidently uninformed. You have to read more than the headline of a news story to understand what it is saying
Wells Fargo has not “raised their rates”
Wells Fargo is doing less business through brokers however.
Wells Fargo’s 30 year fixed rates are actually down by 1/4% in the last week.
After buying my first house in 1980 at the bargain rate of 12% (FHA), and seeing 15% rates in my adult life, I never expected to hold a mortgage under 5%.
This doesn't affect people who already have loans.
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