Sacramento Blogs

Wells Fargo & Co. is tightening its mortgage lending guidelines in more than 200 markets across the country, including more than thirty markets here in California that it has labeled severely distressed or distressed. The tougher lending standards will take effect Feb. 29.

Wells, the second-largest U.S. mortgage lender, has been working since last June to reduce its mortgage banking risk. During the second half of 2007, it introduced tighter credit standards and eliminated certain mortgage distribution channels. Last September, the bank introduced the “At Risk” market policy, which reduced maximum loan-to-value ratios for all outstanding loans against a property based on local market conditions. The loan-to-value ratio represents the amount of a first mortgage lien compared with the appraised value of a home.

The new mortgage guidelines were created as a result of changing market conditions, the bank said, and are a further indication of the depth of turmoil in the housing market across the country — not just in foreclosure hot spots such as California and Michigan.

Mortgage insurer PMI Group Inc., recently tightened its guidelines for the mortgage loans it insures, virtually eliminating very high (above 97 percent) loan to value ratio loans.

The average 30-year fixed rate mortgage now at the lowest level in almost four years.

Freddie Mac says 30-year fixed rate mortgages averaged 5.48 percent this week, down from 5.69 percent last week. It is the fourth consecutive week mortgage rates have declined.

It is the lowest level for 30-year fixed rate mortgages since March 25, 2004, when the average was 5.40 percent.

Bank of America has introduced a new program for homeowners seeking to refinance their variable rate home loans with conforming 30 and 15 year fixed-rate loans and nonconforming 30 year fixed-rate loans. Thousands of single family variable rate first mortgages will face a payment reset in 2007 which will increase their monthly payments.

Mortgage lender Accredited Home Lenders Holding Co. announced it is not taking any new real estate loans and it is closing “substantially all” of its 60 lending offices and five support locations by early September.

Accredited has retail mortgage branch offices in Sacramento, Roseville and Folsom, and it has a centralized retail office in Sacramento.

The mortgage company said five of its ten wholesale divisions will be closed by September 5. There will also be staff reductions at the remaining five mortage offices. The wholesale mortgage work force will be cut by 490 positions, leaving only 340 employees.

Mortgage rates dropped slightly again this week on low job creation and high unemployment according to  Freddie Mac.

The leading mortgage lender said 30-year fixed-rate mortgages averaged 6.59 percent this week, down from 6.68 last week. Last year, 30-year FRMs averaged 6.55 percent.

Bank of America has created a new mortgage program, the ” Neighborhood Champions Protected Mortgage”, exclusively for police officers, firefighters, teachers and medical workers.

The insurance program will repay up to $300,000 on an outstanding mortgage balance in the event of permanent paralysis, accidental death or dismemberment.

Borrowers will receive coverage regardless of health status.