As it tightens the requirements for some mortgage transactions, Wells Fargo is mandating that new customers seeking to refinance a jumbo mortgage take $1 million in balances to the financial institution at a minimum compared to a $250,000 threshold in the past, CNBC reported, citing unnamed sources.
Wells Fargo had cut back on the jumbo mortgage market in April with the first pandemic-caused disruption. Jumbo mortgages, for their part, are mortgages too large for sale to Freddie Mac or Fannie Mae. The bank then said it would just refinance the product for clients that had a minimum of $250,000 in the bank.
But a reported change in policy occurred in a July 1 revamp of lending standards that widely made it easier for current clients to access the loan and made it more challenging for new clients to be eligible per unnamed sources in the report.
The financial institution had removed the $250,000 mandate for current customers last week with an “expansion of guidelines.” Individuals who had a trading or bank account or a mortgage with the bank as of last month’s conclusion were provided jumbo refinance access.
Additionally, the bank made stricter standards for those seeking a home loan in general per an unnamed source. The bank reportedly decreased the size of loans it would take compared to the value of a property by 5 percent.
And, as the COVID-19 health crisis becomes more acute, Wells Fargo is reportedly getting ready to eliminate thousands of positions beginning later in 2020, Bloomberg Law reported.
Pressure has reportedly been building in the bank to reduce costs. As a result, officials have created arrangements that could reduce the workforce by tens of thousands in the end, unnamed sources claimed per Bloomberg Law.
Chief Executive Officer Charlie Scharf has been looking at the bank’s business and creating modifications to its roadmap that are broadly believed to have some reductions after arriving in the position last fall.