Monday, July 23, 2007

Wells Fargo Stops Offering 2/28 loans

Wells Fargo has quit offering 2/28 loans, one of their most popular subprime products. A 2/28 loan had a fixed interest rate for the first two years and an adjustable rate (which could be adjusted twice per year) for the remaining 28 years if the loan was not refinanced. These loans made up 65% of the subprime mortgage loans. Other companies such as Countrywide, Washington Mutual, First Franklin, and Option One Mortgage have also followed suit.

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