Wells Fargo Discontinues Affiliated Marketing Agreements

Responding to concerns from the Consumer Financial Protection Bureau, Wells Fargo announced on July 29 that it is voluntarily discontinuing affiliated marketing agreements with builders and realtors. In general, these type of agreements benefit both builders and lenders. Lenders receive business from builders who refer their buyers and because the lender is familiar with the builder, it helps to make the home buying lending process proceed more smoothly.

While these marketing agreements are legal, Wells Fargo has acted unilaterally to take this action to avoid any appearance of paying for referrals.

The Wells Fargo announcement is expected to have a limited impact on our industry, as the vast majority of our members do not have such agreements with Wells Fargo. However, if the Wells Fargo action causes other financial institutions to follow suit, this could affect builders who have similar agreements with other lenders.

Note that Wells Fargo is not a member of the Home Builders Association of Greenville.

NAHB: proposed 20 percent down rule eliminated

NAHB and home buyers across the land, six federal regulatory agencies on Aug. 28 released a revised proposed rule to implement the credit risk retention provisions of the Dodd-Frank Act. The proposed rule would eliminate a 20 percent downpayment requirement and other onerous underwriting criteria that NAHB opposed. In an official statement, NAHB Chairman Rick Judson said that “this proposed, updated rule is a positive step toward ensuring that creditworthy home buyers have a better chance at securing affordable mortgage loans.” The agencies will seek public comment for 60 days (NAHB will weigh in) before holding a final vote on the new rule