August 06, 2007

Wells Fargo Home Mortgage, America's largest Jumbo loan mortgage lender, essentially throws in the towel and leaves the market

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.



19 comments:

Anonymous said...

let's see what ben does. soon a 1500 sq/ft starter for 1 million will have a 8%, $6500 monthly payment. let's see, i've got to earn 100k pretax to pay for my compton shackhole. wtf is wrong with this picture. f the dumb!!!

Lost Cause said...

Damn, Largest Bank mortgage lender -- and damn -- a bridge falls apart right outside your offices -- all by itself? How wierd is that? Talk about having a bad day, Hehehe...Rates go up to 8% in one day. I mean, George Bush should have toured their offices today as well.

Anonymous said...

Why raise the rates? Why not require 20% down and lower the rates?

Unless they think that all jumbo-priced RE is going to fall by 20%...

Nah, that couldn't happen, could it?

Anonymous said...

Wow.

Anonymous said...

The other lenders will quickly follow. Wells knows this. This doesn't shut them down for long.
BoA, Wamu, they will all raise rates as well.

Oh man, I love that picture of him holding up the steak knifes. Classic. Talk about a picture that sums up the real estate business.

Anonymous said...

Hey, Wells Fargo Mortgage Dept. employees! Last week, when your "manager" told you this will all blow over in 6 months or less, and that it will then be back to "business as usual,", he/she lied to you. Better start sending out the resumes, folks - it's over, for good...

Anonymous said...

Ahhhhhhh.........

WM is a $2 stock waiting to happen.

'Pay option' mortgage = what a joke.

Anonymous said...

Help me out. What is a fixed 30yr jumbo and how is it different than a fixed 30yr conventional loan?

Anonymous said...

long time HPer (not a troll).

This news is not true. People can still go to Wells Fargo and get a 30yr Jumbo for 7 1/8. Plus, WF does not sell many 30yr loans anyway. Most people want the 10/1 and 5/1's.

pwnd

blogger said...

Clarification - Wells loans through brokers at 8%, at the bank they're lower. Jumbos are $417,000 and above I believe

http://tinyurl.com/ypd9ac

Lenders are tightening standards and "raising rates like crazy," said Melissa Cohn , chief executive of Manhattan Mortgage, a New York mortgage broker. She said Wells Fargo & Co. is charging 8% for a prime jumbo 30-year fixed-rate loan that carried a 6 7/8% rate late last week. (Jumbo loans are those too large to be sold to government-sponsored mortgage investors Fannie Mae and Freddie Mac.) A Wells spokesman said rates are lower on loans made directly by the bank than on those through brokers.

Anonymous said...

WTF are you people smoking? 8% mortgages...huh?

I just checked Wells Fargo's web site:

Rates on a 30 year Jumbo are at 7.0% with an APR of 7.156%

For loans under $417K the rate is 6.5% and 6.733% APR.

Anonymous said...

Rates will hit 11% soon. Anything below 10% is simply foolish.
Loans are a risk, I don't take risks for less than 30% return [you know, can I make that cliff jump?....]

Car notes at 13%, Credit cards at 18% across the board. 630 fico score will get you thrown out of any car dealership by this time next year or you'll pay the discount in cash and have to buy the laha and warrnaty, along with supplying your most recent phone bill so we can know where you'll hide when you skip.

Just like it was in 1989.

Anonymous said...

Heck National City Jumbo is even higher ---8+++

Anonymous said...

WFHM just laid off 60% of the people in my office today.. including me. cause effect.
Federal Agencies Issue Final Guidance On Subprime Mortgages

Thanks Fed

Anonymous said...

perspective is the key, I was there when rates were 17% conforming, not subprime, I guess that's why the rich have a longer view. There's nothing new under the sun!

Anonymous said...

WFHM

Traditional NonprimeSM and Expanded Financing AlternativesSM – Alt-A Minus Rates Increase

Due to current marketplace conditions, we are increasing rates on Traditional NonprimeSM and Expanded Financing AlternativesSM – Alt-A Minus loans effective with new applications received on Monday, Aug. 20.

Details of the changes are listed below:
3/27 ARMs:
Credit scores greater than 600 have increased .375%
Credit scores less than 600 have increased .625%
Fixed loans:
Credit scores greater than 600 have increased .25%
Credit scores less than 600 have increased .50%
Expanded Financing Alternatives – Alt-A Minus 5/25 ARMs:
Rates are aligned with Traditional Nonprime 3/27 ARMs

Anonymous said...

They laid off 60% of the subprime departments which haven't had much business in the last 8 months. Like no one knew it was just a matter of time. They've been talking about this for months!

Anonymous said...

WFHM laid off 60% of your subprime department. It's not like you didn't know it was going to happen. That department has been sitting on it's butt for 8 months. They knew by March what was going on.

Anonymous said...

Wells Fargo Home Mortgage is pulling the plug because they are one of the biggest players in the housing crash. They are the biggest prediatory lender in the country. They deliberatly funded loans to people they knew would default. Then had their affliates come in and buy the discounted properties. Making a little at both ends. They set them up. Time for them to get out the shredders. Once the Feds. get pressure from Washington the investigations will begin.