Wells Fargo Suddenly Closed Down All Helocs ** Shades of 2006

[glenn walker]

Yesterday read their announcement -Reminded me back in 2006 a guy at another major banks asked me if I had any Helocs or open lines of credit against any properties. I said no why ? he said because as of next week we are freezing all of them. I had a friend who had one and I told him - he quickly wired $200,000 into his bank account with another bank and sure enough two weeks later the bank had frozen all helocs. Soon almost every major bank in the country had frozen them. My guess is with real estate prices going through the roof in some areas people were starting to use them for other purchases -investments or just stashing away the cash. A precursor to lenders tightening up by year end ? Don;t know but me thinks 2022 is going to be a different type of market.

 

[The Bob]

Wells Fargo shutting down personal line of credit product -- here's what to do instead​

Why would they get rid of a line of credit backed up with RE and then make personal, unsecured loans?

 

[glenn walker]

Wells Fargo shutting down personal line of credit product -- here's what to do instead​

Why would they get rid of a line of credit backed up with RE and then make personal, unsecured loans?

Because the typical Wells Fargo Credit card is between 12% to 18% I know my wife has one. A heloc in the 2% to 3% range is a zero profit product and unlike a first mortgage they can't off -load it onto Fannie Mae. Essentially its dead money. Finally its most often a second lien and if people max them out on inflated vlaues any decline could leave them with loans that would be upside down. Nobody wants seconds in markets that top out or go down. Wells is just getting ahead of the curve. There is no money in real estate loans right now unless you can generate the fees and then immediately off-load them to a GSE. A heloc is a portfolio loan . Lots of people right now living off their helocs - during the last mortgage melt down in CA almost all helocs where wiped out or written off. In CALI houses have increased by as much as 50% in 36 Months so its heloc City : )

 

[Fernando]

During the Great Recession, I used my HELOC to buy properties.
I was thinking of getting HELOC this year. My Wells Fargo banker few months ago mentioned they were going to do HELOCs again.
Oh well, I'll go to another bank to get ready for next downturn.

 

[glenn walker]

During the Great Recession, I used my HELOC to buy properties.
I was thinking of getting HELOC this year. My Wells Fargo banker few months ago mentioned they were going to do HELOCs again.
Oh well, I'll go to another bank to get ready for next downturn.

You better hurry up -: )

 

[Mejappz]

Financial Crisis Scars Tie Up $8.1 Trillion in U.S. Home Equity

U.S. homeowners spooked by the burgeoning pandemic last spring rushed to tap equity in their properties for a hit of ready cash -- and equally wary banks tightened credit or halted lending in response.

www.bloomberg.com

 

[TMG]

I just got an order where WF is the lender. A $2.5m 5,200 sq foot house with a view. Fee?? .......$300 bucks.

I more than doubled it on my condition, awaiting their decline.

 

[Mejappz]

I just got an order where WF is the lender. A $2.5m 5,200 sq foot house with a view. Fee?? .......$300 bucks.

I more than doubled it on my condition, awaiting their decline.

I think I beat you. Yesterday to end the week, I received one in a neighborhood named "Horse Country," a 5,000 sq ft house with a separate guest house a detached two-car garage on two acres. The parcel has a huge equestrian stable.

There have been 12 sales in the past five years in this neighborhood. Wait, that's not all; it was foreclosed last November for $800,00 and is now under contract for $1,700,000. AMC fee $450.00, and here is the kicker the **rush fee** is included. I thought about sending it over to Terrel, maybe next time.

 

[ZZGAMAZZ]

Because the typical Wells Fargo Credit card is between 12% to 18% I know my wife has one. A heloc in the 2% to 3% range is a zero profit product and unlike a first mortgage they can't off -load it onto Fannie Mae. Essentially its dead money. Finally its most often a second lien and if people max them out on inflated vlaues any decline could leave them with loans that would be upside down. Nobody wants seconds in markets that top out or go down. Wells is just getting ahead of the curve. There is no money in real estate loans right now unless you can generate the fees and then immediately off-load them to a GSE. A heloc is a portfolio loan . Lots of people right now living off their helocs - during the last mortgage melt down in CA almost all helocs where wiped out or written off. In CALI houses have increased by as much as 50% in 36 Months so its heloc City : )

How is a HELOC affected by Chapter 7?

 

[Fernando]

I just got an order where WF is the lender. A $2.5m 5,200 sq foot house with a view. Fee?? .......$300 bucks.

I more than doubled it on my condition, awaiting their decline.

My fee would be at least $1,200.