Big hat tip to reader Don for sending this along. Wells Fargo has named nearly every California county a “Severely Distressed Market” which requires LTV reductions of 5% for any conforming loan over 75% LTV and also eliminates financing over 75% LTV for any non-conforming loan. The Wells Fargo Mortgage Express product (which is Wells Fargo’s stated income/stated asset program) is also not permitted in “Severely Distressed Market” areas.
Look for the rest of the market leaders to quickly follow suit. This immediately puts a huge swath of the state with increasingly limited refinance options. A huge portion of California loans are of the non-conforming variety and well over the 75% LTV mark (especially factoring in the major price drops over the last 16 months). This does not bode well for the folks in the Golden State.
Update: I’ve taken the link to the PDF down. Here’s a link to the entire PDF of the Wells Fargo product changes and below I’ve posted a list of the California counties listed in the changes.
No word on whether this is a wholesale-only change or across the company. If you know please drop us an email.
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