Signs of more loan tightening
Wells Fargo announced a key change to their underwriting guidelines today. The reason I am blogging about them is because a) they are fairly big changes & b) Wells Fargo tends to be a bellwether for our industry. Therefore, if Wells Fargo is announcing this today it won’t surprise us to see others following suit in the near future.
The change involves FHA Streamline refinances. One of the big advantages of a FHA loan is that when a homeowner has one and interest rates drop they can qualify for a streamline refinance where they don’t have to re-qualify for a mortgage by supplying proof of income & appraisal to the underwriter. So long as they have made their existing payments on time they qualify. In Wells Fargo’s announcement they will now require FHA streamline refinance applicant’s to supply proof of employment, income, and assets. This is sounding less and less like a streamline.