Wells Fargo eliminates 100% financing

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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. Clearly, very few people with money to buy MBS on Wall Street are betting that home values have stabilized or will show any signs of positive equity gain in the near-term future.

I am not sure if this change is going to be nationwide or California only, but I suspect it will be a nationwide change to guidelines.

Wells Fargo will continue to do 100% financing in one situation only: they will lend an 80% first with a 20% seller carry-back second for fully documented borrowers only. Other than that 100% financing is imminently is danger of extinction at Wells Fargo.

It is clearly the right move, as regardless of credit scores, properties continue to decline in most areas of the country.

This information was passed to me by a Wells Fargo representative, I’ll update when the official announcement and guideline changes appear. If anyone can corroborate it I would appreciate it.