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Wells Fargo Updates
Topics in this Newsflash include:
• Freddie Mac's Alt 97® No Longer Eligible - Effective 7/14/08
• Changes to Policy Requirements for Conforming Loans - Effective 7/14/08
• Maximum LTV Changes For Properties In Ariz., Calif., Fla. and Nev. - Effective 7/14/08
• Reminder of New Appraisal Documentation Age Requirements
• Home Equity Updates
Home Equity Maximum CLTV Updates - Effective 7/12/08
Update to 4506-T Form Requirement
Reminder of New Appraisal Documentation Age Requirements
Freddie Mac's Alt 97® No Longer Eligible - Effective 7/14/08
Wells Fargo Wholesale Lending will no longer accept Freddie Mac's Alt 97 program loans. To be eligible for purchase,
all Alt 97 loans must be locked by 8:00 p.m. CT, July 11, 2008. No exceptions will be allowed.
Changes to Policy Requirements for Conforming Loans - Effective 7/14/08
The following guidelines are effective with locks on or after July 14, 2008, for all conventional conforming loans.
Relocks will not be permitted.
Parameter Credit policy prior to July 14 Credit policy effective on or after July 14
Seasoning on
cash-out refinances
No requirements To be eligible for a cash-out refinance, the borrower must
have owned the subject property for more than six months
(note date to note date is used to calculate six months).
Note: This requirement also applies to the High Balance
Conforming Loan Program.
Seasoning requirements for rate/term refinance
No requirements To be eligible for a rate/term refinance when the most
recent transaction on the subject property was a cash-out
refinance within the last six months, the new mortgage
must be treated as a cash-out refinance (note date to note
date is used to calculate six months).
Note: This requirement also applies to the High Balance
Conforming Loan Program.
(Continued on page two.)
Attention: All Wholesale Clients July 7, 2008
Changes to Policy Requirements for Conforming Loans - Effective 7/14/08, continued
Financed with all lenders, including Wells Fargo:
• If the subject property is the primary residence, there
is no limit to the number of properties financed.
• If the subject property is a second home or
investment property, the maximum number of
properties financed is four.
Note: These requirements do not apply to the High Balance
Conforming Loan Program - continue to follow the current
guidelines for this program.
Maximum number
of 1-4 unit properties
Financed with Wells Fargo:
• If the subject property is
the primary residence,
there is no limit to the
number of properties
financed with Wells
Fargo.
• If the subject property is a
second home or
investment property: the
maximum number of
properties financed with
Wells Fargo is 10.
• Additional requirements
apply to the maximum
number of properties
financed with other
lenders.
Examples for subject properties that are investment
properties and second homes:
• It is acceptable to have the subject property, two
investment properties and one second home.
• It is not acceptable to have the subject property, two
investment properties and two second homes
90% • 90% with Loan Prospector® (LP) Accept or Desktop
Underwriter® (DUSM) Approve or Direct ExpressSM
feedback response without any ineligible messaging.
• 85% with non-traditional credit.
Note: These requirements do not apply to the High Balance
Conforming Loan Program - continue to follow the current
guidelines for this program.
Maximum TLTV
for second homes -
including one-unit
(SFD, Condo, PUD,
Co-op) and two-unit:
for a cash-out
refinance on a fullyamortizing
loan Loans with the Interest-Only payment feature require LP Accept or DU Approve or Direct
Express feedback response without any ineligible messaging for all LTVs.
Maximum LTV Changes For Properties In Ariz., Calif., Fla. and Nev. - Effective 7/14/08
To satisfy new requirements set forth by the mortgage insurance companies, effective July 14, 2008, conventional
conforming transactions with LTVs greater than 90% are no longer available in Arizona, California, Florida and Nevada.
All conventional conforming pipeline loans greater than 90% LTV located in one of the above states must be locked by
8:00 p.m. CT, on July 11, 2008. No exceptions will be allowed.
Note: Online pricing transactions may be subject to additional price adjusters via Broker's First® or policy restrictions not
supported by Direct ExpressSM.
The Wells Fargo Wholesale Lending Broker Guide will be updated to reflect these changes.
Reminder of New Appraisal Documentation Age Requirements
As announced in the June 16, 2008, Newsflash, effective with loans locked/registered on or after July 14, 2008:
• Wells Fargo Wholesale Lending will require reduced appraisal age for conforming and non-conforming new
construction and non-conforming existing property loans.
• Also, an additional field review may be required for certain transactions located in Markets Classifications 3 or 4
(even if an LTV restriction is not applied). Refer to the Newsflash dated June 16, 2008, for complete details.
This information is for use by mortgage professionals only and should not be
distributed to or used by consumers or other third-parties. Information is
accurate as of date of printing and is subject to change without notice. Wells
Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. Home equity
loans and lines of credit are available through Wells Fargo Diversified
Products Group, a division of Wells Fargo Bank, N.A. Member FDIC and
Equal Housing Lender. © 2008 Wells Fargo Bank, N.A. All Rights Reserved.
W08-081
Home Equity Maximum CLTV Updates - Effective 7/12/08
Effective July 12, 2008, Wells Fargo Home Equity will no longer accept new applications with a CLTV greater than 80%:
• All Wells Fargo Home Equity maximum CLTVs will be reduced by 5% across the board (see attachment).
• Standalone transactions with a CLTV greater than 80% must be submitted prior to July 12, 2008.
• Wells Fargo simultaneous transactions with a CLTV greater than 80% must be registered prior to July 12, 2008.
• Commitments will be honored until the commitment expiration date and will follow the credit policy guidelines
used to provide the commitment. If a credit commitment expires on or after July 12, the application will be redecisioned
based on the credit policy guidelines in effect when the loan is re-decisioned.
• Exceptions to the 80% maximum will not be allowed.
The Wells Fargo Home Equity program overview and Broker Guide will be updated to reflect these changes.
Wells Fargo Home Equity continues to offer a full range of home equity options, including purchase seconds behind
Wells Fargo first, refinances, cash-out refinances and standalones, all available up to 80% CLTV.
Update to 4506-T Form Requirement
In the June 23, 2008, Newsflash, Wells Fargo Home Equity announced that on all standalone transactions a 4506-T form
(Request for Transcript of Tax Return) must be signed by borrowers and returned prior-to-funding. This policy has been
updated, effective immediately; the signed 4506-T is required prior to documents being drawn.
To help ensure a smooth process, clients are strongly encouraged to submit a signed 4506-T in all standalone application
packages.
There is no change to the 4506-T form requirement for Well Fargo simultaneous transactions.
Reminder of New Appraisal Documentation Age Requirements
As announced in the June 16, 2008, Newsflash, effective with all applications received on or after July 12, 2008, Wells
Fargo Home Equity will be reducing the Appraisal Product document age from 120 days to 90 days at the note date.
Refer to the June 16, 2008, Newsflash, for complete details.
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