Wells Fargo HELOC Suspended Explained

Wells Fargo HELOC suspended due to a change in your credit score, income, or loan-to-value ratio. This can happen even if you've made timely payments.

Wells Fargo may temporarily suspend your HELOC if you've experienced a significant change in your financial situation. This can include a decrease in income or a change in your credit score.

If your HELOC is suspended, you may still be able to access some of the funds, but you'll need to contact Wells Fargo to discuss your options.

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Wells Fargo has temporarily suspended accepting applications for new home equity lines of credit (HELOCs) due to economic uncertainty caused by the coronavirus pandemic.

The suspension took effect on April 30, and it's unclear when the bank will resume accepting new HELOC applications.

Wells Fargo employees who worked on home equity loans will be reassigned to process purchase and refinance mortgage loans, where applications have increased as interest rates have dropped to record lows.

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This is not the first time Wells Fargo has taken action to rein in HELOCs; the bank raised the minimum credit score for home equity loans to 720 in April.

Banks have been retreating from loans tied to housing as the coronavirus pandemic impacts home values and the creditworthiness of borrowers.

Wells Fargo has also tightened conditions for mortgages, requiring higher FICO scores and bigger down payments for new loans.

Homeowners who've already secured a HELOC are at risk of losing access to their home's equity, with suspended accounts requiring review for reinstatement of their credit line.

The suspension of HELOCs is not unique to Wells Fargo; JPMorgan Chase also suspended new HELOC applications in April, citing economic uncertainty.

Here are some key details about the Wells Fargo HELOC suspension:

Wells Fargo has taken specific action in response to the economic uncertainty caused by the COVID-19 pandemic. The bank has temporarily stopped accepting applications for all new home equity lines of credit (HELOCs).

This decision reflects careful consideration of current market conditions and the uncertainty around the timing and scope of the anticipated economic recovery. Wells Fargo employees who worked on home equity loans will be reassigned to process purchase and refinance mortgage loans.

The HELOC suspension is not the first time Wells Fargo has taken action to rein in HELOCs. Last month, the bank raised the minimum credit score for home equity loans to 720, up from 680.

Wells Fargo's move away from HELOCs is a precautionary measure to minimize risk during tough economic times. HELOCs are riskier products for banks because in a foreclosure, the lender who made the primary mortgage is first in line to get paid in a recovery.

Here are the key dates related to Wells Fargo's HELOC suspension:

The HELOC suspension will continue until Wells Fargo's analysis of market conditions indicates that it is appropriate to resume the responsible extension of HELOCs to homeowners.