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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.
Come on guys the whole economic system is severly distressed. We have two types of people. People that deal with reality or people who are in denial. Stores and office vacancies are at a high. Properties (commercial and residential) are worthless unless you sell it at a fire sale. Banks are almost out of money. This is the shift of powers in the world. People are stopping to spend and this slow down will go further and further until we hit the GREAT DEPRESSION II. We are always reacttive as oppose to being practive. I know people dont believe this right knoe because they are saying this is impossible in America but we hit a ceiling on the economic cycle and there is only.
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