Another Subprime Mortgage Crisis in Making?

[monkeyboy]

Reuters reported that Wells Fargo will relax its standard. The company is dropping the minimum credit score on jumbo loans (loans too large to receive a government guarantee) from 720 to 700. Wells Fargo is also buying jumbo loans from other lenders that go toward the purchase of a second home.

This news comes six months after Wells Fargo said it would loan directly to borrowers with credit scores as low as 600 who are eligible for Federal Housing Administration (FHA) insurance. The previous minimum credit score was 640.

Of the big banks surveyed by the Federal Reserve last month, 39% said they were relaxing requirements for prime residential mortgages.

It's good to see the government and big banks back to their old tricks. Luckily, we know how this will eventually play out. And we'll be ready.

[SunshineInCA]

I am thinking about heloc more money out and prepare for the next bubble.

Good thought.