Wells and other banks have been looking at arnsteadily diminishing level of mortgage originations since rates began to rise arnyear ago.  The Mortgage BankersrnAssociation’s (MBA) Market Composite Index, a measure of mortgage applicationrnvolume, has fallen for 27 of the 43 weeks since the beginning of the thirdrnquarter of 2013 and its Purchase Index has been lower than the same week a yearrnearlier in all but one week, the one affected by the Thanksgiving holiday.  The second quarter of 2014 alone saw a droprnof 50 percent in loan volume compared to a year earlier MBA said.  Reuters says that Wells Fargo’s drop has beenrneven steeper, down 58 percent during the same period.</p

At the same time rising home prices have increasedrnthe share of home purchasers who require jumbo mortgages.  This is especially true in SanrnFrancisco-based Wells Fargo’s home territory, but also in many other largerncities.</p

Wells Fargo is not alone is seeking to boostrnmortgage volumes.  MBA said this weekrnthat one factor in the rise of its index measuring access to credit was the introductionrnof new jumbo products last month, largely hybrid adjustable rate mortgages.  Also, the Federal Reserve noted that 24rnpercent of the banks responding to its quarterly Senior Loan Officers Surveyrnreported that they had “somewhat” eased lending requirements for primernresidential mortgages over the last three months although there was norndistinction made between conforming and jumbo varieties. In the same surveyrnover 50 percent of responding lenders said demand for prime mortgages wasrnhigher by some degree than three months earlier.</p

Still, that banks are loosening standards doesn’trnnecessarily mean it is easier for everyone to get a loan.  Restrictions on credit scores remain tight,rnespecially where there is no government backstop, and debt-to-income ratiosrnhave barely budged in recent years.  ThernFederal Reserve survey shows little appetite for banks to return to subprimernlending; only four of the 71 banks responding to the survey said they do any ofrnthat type of origination.</p

Reuters quotes Wells Fargo executives as saying its steps tornexpand access to mortgage credit are low risk as all borrowers must demonstraternand ability to repay.  The bank also apparentlyrnsees cross-selling advantages to increasing its share of the jumbo market, evenrnif purchasing the loans.   The private banking section of its website isrnall about mortgages, citing the size it will lend (up to $6 million, $3 millionrnfor cash out refis) and the client centered focus of its lending; a singlerndedicated point of contact to underwrite and manage the loan, appointment of arnwealth management relationship manager and a dedicated post-closing customerrnservice line.  There are also perks suchrnas interest rate protection during construction, financing for the self-employedrnand others with “unique” income situations, and one-of-a-kind mortgage productsrnand pricing discounts if you become a Wealth Management client.  </p

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