Denver, CO, 06/04/2014 (Stocksntrade) – Wells Fargo & Co (NYSE:WFC) the banker for every American has strategically chosen to give back to its customers in kind. For a very long time the plans under which the bank issued loans to those who borrowed from it nearly never saw their principal amount dwindling when they repaid.
And this is what WFC hopes to remedy with its new lending strategy.
It has chosen to pull-back on the long payment plans for nearly all of its clientele retaining this method only for its ‘wealthy’ customers.
Ever since this Wall Street Journal report broke the news, analysts and the consumer too has been dwelling keenly on who and how it is going to benefit.
Wells Fargo & Co (NYSE:WFC) has over the years become a one-of –a-kind mortgage lending banker and continues to offer this service under various products.
The changes will now be introduced to one of the most important products that the banker currently offers- Home equity.
San-Francisco based bank, with a market capital of 269.09 billion has indicated that it will make necessary changes to one component of its home-equity lines of credit of HELOC – interest portion of the loans.
Most of the loans serviced under this product were during the thriving years of the housing sector and in today’s circumstances is a pressure which the borrower is struggling to fulfil. The loans now require higher payment in the current years, because it is only now that such loans have begun to pay off the principal portion of the loan.
The downtrend of this plan, is the fact that those who have borrowed from the bank are now in a situation where they are not able to leverage equity factor on their homes to look for refinancing of the debt!
Wells Fargo & Co (NYSE:WFC) will however continue to offer many interest only HELOC.