Just in: Wells Cuts Home Equity Products

The following memo was released today:

Wells Fargo regularly analyzes the market and makes changes that align with our prudent lending practices. Given the reduced liquidity in the Capital Markets, we are changing our Wholesale Home Equity lending policies because the volume projected for this product for the foreseeable future is not expected to generate returns commensurate with the associated risks and our portfolio requirements.

The following changes for Wholesale Lending will be effective at end of business, Monday, Nov. 26, 2007.

· We will continue to offer:
· Wells Fargo simultaneous second liens, and 1 standalones in second lien position where the existing first mortgage is with Wells Fargo.

· We will discontinue:
· non-Wells Fargo simultaneous second liens, i.e. piggybacks with any lender other than Wells Fargo will be prohibited;
1 standalone second liens where the existing first mortgage is not already with Wells Fargo, i.e. standalones with any lender other than Wells Fargo will be prohibited; and,
2 standalones in the first-lien position
· In addition to the Home Equity products still offered in our Wholesale channel, simultaneous close CCG Home Equity products and stand-alone Home Equity products will continue to be available through our retail lending channels and other home equity products will be available through Wells Fargo Financial. And, we will continue to offer prime first mortgage products throughout our lending channels.
1 Various Home Equity products will also continue to be available through our Retail lending channel and Wells Fargo Financial. And, we will continue to offer prime first mortgage products throughout our lending channels.
2 We will honor complete applications (i.e., 1003, Loan Submission Form, and credit bureau) submitted on or before end of business, Monday, Nov. 26, provided they fund by the earlier of the expiration of the credit approval or December 28, 2007.
· We will not extend any credit expirations.

Unfortunately, this decision impacts Wholesale team members solely dedicated to the sale of Home Equity products. Today’s decision was not made based on performance of the team members associated with this program and is particularly difficult because of the great work this talented team has contributed to our organization.

Team members directly impacted within WFHM by this decision were notified earlier today. As we reforecast Home Equity volume, any additional impacts will be assessed. Our diversified financial services company presents opportunities for affected team members within other areas of the company, and we encourage impacted team members to apply for open positions.

Wells Fargo remains committed to serving the needs of our Wholesale clients and their customers by delivering a variety of mortgage products, including Home Equity loans behind Wells Fargo first mortgages. We continue to be uniquely positioned to succeed in this challenging market through sound management and appropriate product and pricing practices.

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