Wells Fargo to Raise Minimum Credit Scores on FHA Loans (As CFPB Director Cordray Takes Credit For Success)

O-ho the Wells Fargo Wagon isn’t a-comin’ down the street, Oh please let it be for me! (not if your FICO score is too low!)

According to American Banker’s Kate Berry,

Wells Fargo is raising minimum credit score requirements on Federal Housing Administration loans, part of the ongoing jockeying by large banks to limit lawsuits by the Justice Department for defective FHA loans.

John Shrewsberry, Wells Fargo’s CFO, said Wednesday that the San Francisco bank will not make loans to FHA borrowers with low credit scores because of their higher rates of default.

“We will be adding back the credit overlays so we make fewer loans that are close to [the FHA’s] most accommodative end of the credit spectrum,” Shrewsberry said at the Barclays Global Financial Services Conference in New York. “Those are the loans that are going to default and those are the defaults loans that we’re going to be arguing about 10 years from now and we’re not going to do that again.”

Actually, I testified in the House or Senate that I was surprised that banks were still originating mortgage loans since you get raked over the coals … if the borrower isn’t clothed in AAA-armor coated with gold. And the mortgage isn’t something that is disdained by regulators, like the CFPB.

Richard Cordray, Director of the CFPB, is taking credit for the success of the housing market.

This is success? Lowest new home sales (adjusted by population) and crashing homeownership rates?



Perhaps Cordray can record “76,000 regulations.”

Is restricting mortgage designs and the supply of credit the same as “success?”

Breaking Bad: Equities Blasted, Crude Oil Breaks Below $40, US Treasury 10Y Yield Breaks Below 2 Percent

Everyone seems focused on international equity markets. And here is why!


The Shanghai composite index is down 8.5%.


But lost in the equity headlines is that 1) crude oil futures are down below $40 and 2) the 10 year US Treasury yield have broken through 2%.



Yes, it is the “Walter White” financial market.