Want a jumbo refi from Wells Fargo? Hope you’ve got a million bucks

Wells Fargo is quadrupling its balance requirement for customers applying for jumbo refis.

The lending giant is now requiring new customers to bring at least $1 million in balances if they want to refinance a jumbo mortgage, according to a CNBC report. That’s up from their previous balance requirement of $250,000.

The policy change was part of a July 1 overhaul of lending guidelines that lowered the threshold for jumbo refinances for existing Wells Fargo customers, while making it much more difficult for new customers to qualify, sources with knowledge of the matter told CNBC.

While many lenders have tightened mortgage credit in response to the COVID-19 pandemic, that tightening has been especially pronounced at Wells Fargo, which is also operating under an asset cap imposed by the Federal Reserve in response to its numerous scandals. In May, the bank hit pause on accepting HELOC applications. The month before that, Wells Fargo restricted its jumbo mortgage program, announcing that it would only refinance jumbo loans for customers who had $250,000 in liquid assets in the bank.

However, the move caused plenty of dissension within the ranks, according to CNBC. Demand for refis is 111% higher than it was a year ago at this time, according to the Mortgage Bankers Association – and Wells Fargo mortgage personnel complained that they had to turn away good customers who sought to take advantage of historically low rates.

In response, Wells Fargo last week issued an “expansion of guidelines” that nixed the $$250,000 requirement for existing customers, according to CNBC. Under the expansion, customers with a Wells Fargo bank or brokerage account of any level, or those who already had a mortgage with Wells Fargo, were able to access jumbo refinances.

“The changes we implemented on July 1 substantially increased the number of borrowers from which we’ll accept applications for non-conforming refinances,” Tom Goyda, Wells Fargo spokesman, said in a statement.

But if new customers want a jumbo refinance, they’re out of luck unless they bring a million bucks to the bank, CNBC reported. The requirement can be satisfied with a combination of deposits or investment balances.

Wells Fargo also tightened mortgage lending standards across the board in the overhaul, sources told CNBC. For both primary and secondary home mortgages, the bank reduced the LTV by 5%. It also boosted its post-closing liquidity requirement for borrowers from 12 to 18 months, CNBC reported.