Wells Fargo yanks popular subprime loan
Bank says its will stop offering 2/28 adjustable-rate mortgage loans in response to market, regulatory pressure.
July 23 2007: 5:17 PM EDT
“NEW YORK (Reuters) — Wells Fargo & Co., the fifth-largest U.S. bank, said Monday it stopped offering a popular subprime mortgage product in response to market and regulatory pressure.
The company in an e-mail said it ended Friday retail offerings of so-called 2/28 loans, which at 65 percent of all subprime mortgages last year are the staple of the industry. Payments on 2/28 adjustable-rate mortgages (ARM) are based on rates that are fixed for two years and then are adjusted twice a year for the remaining 28, if the loan is not refinanced…”
