Wells Fargo's standards for mortgages it buys from other lenders remained more conservative than those it offers directly to consumers via its branches and online, Goyda said. The minimum credit score on those jumbo mortgages is 680.
The latest expansion of Wells Fargo's mortgage lending comes six months after the bank began to offer home loans directly to borrowers with credit scores as low as 600 that were eligible for insurance with the Federal Housing Administration. Its previous minimum credit score for FHA-insured loans was 640.
Wells Fargo executives have said its steps to expand access to mortgage credit are low-risk, as all borrowers must demonstrate an ability to repay the loan in accordance with rules issued by the Consumer Financial Protection Bureau that came into effect in January. Most products the bank offers are 30-year, fixed-rate loans that do not allow borrowers to defer principal payments, Wells Fargo Home Mortgage President Mike Heid said at the bank's May investor day.
"This talk about returning to subprime is just nonsense," Heid said.
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As industry-wide lending volumes have declined over the last year, Wells Fargo's drop has been even sharper. The bank said last month that it made $47 billion in home loans in the second quarter, 58 percent less than the same period of 2013, compared with a 50 percent fall in industry-wide volumes, according to estimates from the Mortgage Bankers Association.
"The purchase market is softer than we thought that it would be," said Wells Fargo Chief Financial Officer John Shrewsberry on a July conference call with analysts. "We're not seeing breakout returns to pre-crisis levels of the enthusiasm around homeownership."
Chief Executive John Stumpf told Reuters in a July interview that the volume of mortgages it purchased from other banks in the second quarter was lower because those lenders are now selling directly to investors under government programs.