It recently became a little tougher for some entry level buyers with poor credit to get their first home.
According to the NAR’s Economists’ Outlook blog, Wells Fargo changed its adds-on fees policy in May, increasing fees for buyers who are borrowing less than $140,000 and that have credit scores below 700.
This means that borrowers with credit scores between 680 and 700 who have a $120,000 mortgage will pay $17 more per month, or 3 percent. People with scores between 640 and 660 have fees raised 6 percent, which comes out to an extra $39 each month.
Wells Fargo was one of the few large national banks to enter and to support the entry-level portion of the market following the recession, while other large banks sat on the sideline. It has since pulled back and the void left by it and other large national banks has been filled by credit unions and non-bank lenders. While a few lenders and funders have similar overlays, Wells has the largest reach and its actions could set a precedent for other lenders.