They just raised their 30 year jumbo rate available to brokers from 6 7/8 to 8% overnight, putting themselves out of business (by choice).
Man, I'd hate to be in a Wells Fargo Home Mortgage office on Monday. Set of steak knives anyone?
It'd also suck to be a McMansion builder (and Jumbo junkie) like Toll Brothers, or a new homedebtor trying to fund Jumbo. Or heck, it'd suck to be any homedebtor anywhere in America trying to sell a home to the sound of silence. Dead silence.
WHERE DID ALL THE BUYERS GO? FOR THE LOVE OF GOD WHERE DID ALL THE BUYERS GO?
From CNBC Realty Check:
Wells Fargo Raises Rates: Are Homeowners Out In The Cold?
"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 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, Sovereign 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.