FILE PHOTO: Warning signs for coronavirus disease (COVID-19) are seen on a Wells Fargo bank door in New York City, U.S., March 19, 2020. REUTERS/Lucas Jackson/File Photo
(Reuters) – Wells Fargo & Co, the largest U.S. mortgage lender, said on Thursday it will temporarily stop accepting applications for home equity loans given the economic uncertainty fueled by the COVID-19 pandemic.
The suspension will stay in place until bank executives have better sense into what the economic recovery will look like, bank spokesman Tom Goyda said in a statement.
Banks have been making moves to tighten credit quality in response to the novel coronavirus, which has threatened to plunge the global economy into a deep recession.
Earlier this month, Wells Fargo raised its minimum credit score for home equity loans to 720 from 680.
JPMorgan Chase & Co, the largest U.S. bank by assets, has also raised its mortgage borrowing standards and temporarily stopped accepting new applications for home equity lines of credit on April 17.
Wells Fargo employees who previous worked on home equity loans will switch over to help the bank process purchase and refinance mortgage loans where applications have surged due to lower interest rates, according to sources familiar with the policy change.
Earlier this month the bank also hit pause on various home loan products, including cash-out refinance loans, most home equity loans above $250,000 and riskier non-conforming purchase loans.
Reporting by Imani Moise; Editing by Sandra Maler