The lending giant is hitting pause on HELOCs due to the COVID-19 crisis
Wells Fargo has announced that due to the economic uncertainty caused by the COVID-19 pandemic, it has stopped accepting applications for home-equity lines of credit.
The temporary freeze began at the close of business Thursday, according to a Reuters report.
The HELOC suspension will remain in place until bank executives have an idea of what the economic recovery from the pandemic will look like, said Wells Fargo spokesman Tom Goyda.
“The decision to temporarily suspend the origination of new HELOCs reflects careful consideration of current market conditions and the uncertainty around the timing and scope of the anticipated economic recovery,” Goyda said in a statement to PYMNTS.com.
Wells Fargo joins JPMorgan Chase in the HELOC suspension. Chase stopped accepting new HELOC applications April 17.
Wells Fargo employees who previously worked on HELOCs will switch over to help process purchase and refinance loans, which have seen a surge in applications due to lower interest rates, according to Reuters.
Wells Fargo has also temporarily suspended other mortgage products, including cash-out refis, most home-equity loans above $250,000, and some riskier non-conforming purchase mortgages, Reuters reported.
