Things could be loosening up in the mortgage lending market.
At least that’s the interpretation of a decision by Wells Fargo, which announced last week to relax its mortgage lending standards, allowing FHA borrowers with credit scores as low as 600 to qualify for mortgages, according to The Wall Street Journal. Previously, the bank required a minimum credit score of 600 for these loans.
The FHA has variable lending and down payment standards depending on a home buyer’s credit score and other factors. The lower the score, the larger the down payment.
Wells Fargo’s Tom Goyda explaining the move to the WSJ:
“The goal is to increase access to credit, especially for low- and moderate- income borrowers and first-time home buyers. These are fully underwritten, fully documented loans, consistent with FHA program guidelines and responsible lending principles.”
The WSJ reports that the bank made the decision to relax the standards “because they are more confident that forthcoming policies surrounding defaulted loan repurchases will provide more clarity, according to people familiar with the matter.”
- FHA Will Drop Loan Limits in 2014
- The Credit Score Obstacle
- How a $100 Mistake Can Sink Your Credit Score
This article originally published at http://dc.urbanturf.com/articles/blog/wells_fargo_relaxes_credit_rating_requirements_for_mortgages/8138
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