Wells Fargo and Other Big Lenders Due to Raise Credit Score Requirements for FHA Loans

NEWARK, N.J. - Sept. 22, 2015 - PRLog -- Wells Fargo recently announced that it would raise the minimum credit score requirements for FHA loans from 600 to 640. This is being done to protect the lender from lawsuits from the Justice Department regarding defective FHA loans. Wells Fargo’s CFO, John Shrewsberry, said that borrowers with lower credit scores typically have higher loan default rates. He also said that his company would be adding credit overlays back into their loan process to make it harder for consumers with poor credit scores to get their loans approved.

All this comes as a result of lawsuits originating from the Justice Department. They have sued numerous lending organizations in the past, such as Bank of America, Wells Fargo, JPMorgan Chase, U.S. Bancorp, and Citigroup for defective loan products. Most of these institutions have reached settlement agreements with the FHA. While many of these banks are saying that the new proposal lacks clarity, they’re all taking steps to ensure that they are compliant. Lenders can be held responsible for triple damages under the False Claims Act. Experts say that the new requirements will exclude about 15% of borrowers from being able to buy a home.

Home sales have steadily risen across the nation during the past few years and Wells Fargo alone reported $62 billion in home loans during their second quarter. This number was up 32% from the previous quarter. The Feds have recently said they would not raise interest rates due to the economic meltdown in China and Greece, so this is still a good time to buy a new home.

For those who would like to buy a home but are not sure they will qualify, Jason Kaplan, President of The Credit Pros has some advice: “Most credit reports contain errors that drastically decrease FICO scores.  Borrowers can increase their credit score simply by challenging such inaccurate, outdated or unverifiable negative item on their credit report.  In many instances, this process can raise the credit score significantly.  Though it does take time and a commitment to stay involved in the process, consumers are rewarded with higher scores and lower rates.”

Mr. Kaplan and his team at The Credit Pros works with consumers each year helping them improve credit scores by educating consumers on simple things that they can proactively do to increase their FICO scores while The Credit Pros team challenges the inaccurate, outdated and unverifiable items that are negatively impacting their credit report. This process, when done right, takes time, skills and resources to get best results. However, The Credit Pros can save a consumer thousands of dollars in savings on a 30-year home loan.


About The Credit Pros

The Credit Pros works with consumers to help them identify problems on their credit report and get those repaired. They offer a wide range of services from one-on-one consultation to Cease and Desist Letters to Creditors. The company has a strong background in credit reporting and has helped thousands of consumers restore their good credit with disputes, debt validation letters to creditors and Goodwill letters to creditors. They are registered and bonded and have monthly plans, as well as per-deletion plans.