Wells Fargo is Now Requiring Clients to Have $1 Million in Balances to Refinance Jumbo Mortgages

With the economy in such dire straits, Wells Fargo made a surprising move by telling new clients that they need to have $1 million in balances for certain mortgage refinancings.

According to a CNBC report citing sources familiar with the bank’s new policies, the company now requires new customers to bring at least $1 million in balances if they want to refinance a jumbo mortgage. This is up from the $250,000 requirement before.

The change came in a July 1 overhaul of lending guidelines that broadly lowered barriers to the product for existing customers, while making it far harder for new ones to qualify, said the anonymous sources.

“They don’t want to take somebody else’s balance sheet and put it in on theirs,” said one of
Demand to refinance home loans has been torrid the last few months, and refinance applications were 111% higher than a year ago, according to the Mortgage Bankers Association’s index this week.

The bank was the biggest player in jumbo mortgages last year, according to research firm Inside Mortgage Finance.

“The changes we implemented on July 1 substantially increased the number of borrowers from which we’ll accept applications for non-conforming refinances,” Wells Fargo spokesman Tom Goyda said in an email.
“They don’t want to take somebody else’s balance sheet and put it in on theirs,” said one of the sources. “We’re very busy and they wanted to slow down the number of loans coming in.”

Disclaimer: We have no position in Wells Fargo & Co. (NYSE: WFC) and have not been compensated for this article.