Insanity Definition On Full Display

Wells Fargo recently announced a new mortgage product they are calling “A game changer in the industry.” According to the bank, this product is purported to facilitate the dream of homeownership to more people by …wait for it… lowering the down payment and out-of-pocket costs associated with a more conventional mortgage products, while also offering more consumer friendly income and credit guidelines.

This new product that those at Wells Fargo have declared “revolutionary” is called your First MortgageSM and one has to imagine it must have been developed by somebody with a severe case of amnesia and who has recently suffered from a bad concussion.

Wells Fargo Home Lending contends that the new program, “provides access to credit while maintaining responsible lending practices.” However, according to their own press release, the loan program offers a down payment of as little as 3 percent for first-time homebuyers and low-to moderate-income credit history. And Income standards have been loosened to include others who will live in the home, such as family members or renters. Also, the required minimum credit score to qualify for this program was reduced down to just 620. 

But for those who may be concerned Wells Fargo is lending like its 2005…have no fear; Well’s has partnered with in their words “credit experts such as Fannie Mae” to develop a loan option that gives homebuyers the best offering in the market. 

Their so-called credit expert, Fannie Mae, was the same Fannie Mae that was placed into conservatorship by the United States Federal Housing and Finance Agency on September 7, 2008. The then quasi-government agency ran aground when it failed to properly manage credit risk, leaving the company vulnerable to bankruptcy during the 2008 financial crisis.

One safeguard they did keep in place was proper documentation. But, if pesky w-2’s and bank statements are standing between you and the home of your dreams–have no fear–there is a revolutionary new loan product for you too.  New York City-based Quontic Bank just rolled out its product called “Lite Doc,” it’s a five-year, adjustable-rate mortgage that requires only two months of employment verification and bank statements.