Scott Olson, Executive Director of The Community Home Lenders of America (CHLA) today released the following statement in response to the announcement by Wells Fargo that it was pulling out of the correspondent mortgage business:
“CHLA is deeply disappointed that Wells Fargo is pulling out of the correspondent loan business – pulling out of buying even government agency loans with little or no risk.
This action makes it all the more imperative that federal agency mortgage programs – FHA, Ginnie Mae, Fannie Mae and Freddie Mac – don’t pull in at the same time on authority for direct lending access for IMBs, which is critical to maintaining access to credit for underserved and other borrowers.”
Wells Fargo pulling out of corresponding lending means increases the importance of IMBs maintaining direct access to sell to Fannie and Freddie and to issue Ginnie Mae securities for FHA loans. IMBs now originate over two thirds of all loans, over 90% of FHA loans and over 70% of Fannie/Freddie loans.