Wells Fargo & Co (NYSE:WFC) will require new customers seeking a jumbo mortgage refinancing to have a balance of at least $1 million. The change was effected on July 1, 2002, following an overhaul of lending requirements.

Wells Fargo increases refinancing requirement for jumbo mortgages

According to people familiar with the policy, Wells Fargo is raising the requirement from the previous $250,000 for new customers. This is part of a policy change that will lower current customers’ barriers to the product but make it hard for new clients to qualify. Wells Fargo, the largest mortgage lender in the US has been running on double pressure for the Federal Reserve cap and COVID-19 pandemic.

Industry players have tightened mortgage access requirements in the wake of the COVID-19 pandemic, but Wells Fargo has felt the pullback more. The lender can’t grow its Balance Sheet due to the Fed order, which is one of the regulatory restrictions tied to its 2016 sham accounts scandal. In April, Wells Fargo grappled with the upheaval caused by COVID-19, leading to a market pullback for jumbo mortgages. These are big loans that cannot be sold to government-backed Fannie Mae and Freddie Mac. The company said that it was shunning riskier mortgages and could only refinance the jumbo mortgage of customers having balances of at least $250,000.

Wells Fargo to cut jobs

The company is feeling the pandemic’s effects and indicated that it will cut its workforce later this year as it seeks to reduce costs. Wells Fargo Executives are drawing plan that could see tens of thousands of employees laid off. In June, the company’s CFO, John Shrewsberry, hinted about the plans to cut some jobs.

In a virtual conference, Shrewsberry said that there will come a time possibly sometime this year when they will execute programs in place. He indicated that some of the programs still in place were meant to get the company’s total expense base, which means the total headcount.