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July 30, 2007
Wells Fargo Ends Sub-Prime Loan
Wells Fargo & Co. has joined Countrywide Financial Corp., Washington Mutual Inc., Merrill Lynch & Co. subsidiary First Franklin and H&R Block Inc. subsidiary Option One Mortgage in ceasing originations of 2/28 adjustable-rate loans. These subprime products boast fixed borrowing costs during the first two years, after which the rate adjusts two times annually over the remainder of the loan term. Last year, 65 percent of all subprime mortgages were 2/28s. Lenders have backed away from such loans in response to calls by regulators to underwrite mortgages at their fully indexed rates.
Posted by S. Germain at July 30, 2007 08:31 AM