24/05/2024 2:23 PM

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Wells Fargo will no longer accept applications for home equity lines of credit

A Wells Fargo logo is seen at the SIBOS banking and financial conference in Toronto

Chris Helgren | Reuters

Wells Fargo, one of the largest home lenders in the U.S., is stepping away from the market for home equity lines of credit because of uncertainty tied to the coronavirus pandemic.

The bank informed its mortgage personnel of the news Thursday in a conference call, according to a source, and the move was confirmed by company spokesman Tom Goyda.

“Wells Fargo Home Lending will temporarily stop accepting applications for all new home equity lines of credit after April 30,” Goyda said in an emailed statement. “The decision to temporarily suspend the origination of new HELOCs reflects careful consideration of current market conditions and the uncertainty around the timing and scope of the anticipated economic recovery.”

Banks have been retreating from loans tied to housing as the coronavirus pandemic impacts home values and the creditworthiness of borrowers. Earlier this month, JPMorgan Chase said it was dropping HELOCs and also tightened conditions in which it will make mortgages, requiring higher FICO scores and down payments for new loans. 

The bank said the HELOC suspension will “continue until our analysis of market conditions indicates that it is appropriate to resume the responsible extension of HELOCs to homeowners,” Goyda said. 

 

This story is developing. Please check back for updates.

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