Here We Go Again: Wells Fargo Is Trying To Give Mortgages To Low-Income, Debt-Heavy Millennials Living At Home

Tyler Durden's picture

Just last week we reported that Wells Fargo was reintroducing 3% down mortgages on its own, without going through the FHA. The reason we said, was that due to Wells' mortgage origination pipeline drying up, the bank was desperate to find new and innovative ways to boost lending.


Now we have direct confirmation that indeed Wells Fargo is desperate, and the plan to boost mortgage lending is to... drum roll... lure millennials out of the comfort of their parents home and into a house of their own.

The fact that millennials don't make much money and are drowning in debt apparently doesn't bother Franklin Codel, head of home lending for the bank.

Codel said Wells Fargo is now in a position to capitalize on the "very important" trend of millennials who have been unable or unwilling to buy property. "Demographics, ultimately, will win out and many of these folks will start families and want to become homeowners." said Codel, according to the Financial Times.

The target for Codel is understandable, with more millennials living at home today than at any other point in time since the great depression it's easy to see what would drive that discussion.


However, what shouldn't be forgotten is the fact that there is a reason that millennials are living at home, often times rent free. Millennials are making less money than prior generations, and student loan debt is so burdensome that it doesn't make it feasible to do otherwise.


Self-Help Ventures Fund decided to partner with Wells Fargo on insuring the 3% down mortgage program - let's hope $1.6 billion in assets is enough to cover what the bank is about to get into, otherwise another taxpayer bailout is going to be needed.

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asteroids's picture

Disgusting. They simply want debt serfs. Modern slavery.

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) asteroids May 30, 2016 7:47 PM

Now this is the entrepreneurial spirit that America thrives on back in action.  Some might see "more millennials living at home today than at any other point in time since the great depression" as a problem, others see it as an upside opportunity.  Recovery!

nmewn's picture

Community Reinvestment Act 2.0.

You statist-socialists do realize I'm about to fund my retirement by shorting your highly regulated-statist stupidity...right? ;-) 

The Merovingian's picture

Timing is everything ... if they are just rolling this out, then this fucker isn't going under until they've fleeced enough Sheeple by enticing them into originating enough loans to securitize and then sell those same loans back to the Sheeple in their 401ks. Then the plug is pulled, and the elite get to lather, rinse and repeat this fucking nightmare. Makes me want to scream ...

finametrics's picture

Agree. 1 more diparoo before we move higher.

The Saint's picture
The Saint (not verified) finametrics May 30, 2016 9:43 PM

Uhhhh, it was the government's fault for FORCING banks to make these loans the last time and it is the government's fault this time.  Has no one else been following Obama's new sub-prime directive to banks to make housing loans to the poor black food stamp crowd?

chunga's picture

It's important to understand the banks and the govt. are on the same team despite anything either of them has to say to the contrary.

Just look at the players at FNMA, FHLMC and you'll see.

Déjà view's picture

'Student Drivers'...

Finally a garage to park that new car, keep from prying eyes of repo man. Insurance: FEMA.

Room for meth lab, sell sex to pay for student loans, limits are boundless...ahhhh The Land Of Milked And Money...

Never One Roach's picture

Why not? As long as the bankers can pass their losses onto the taxpyers, why not hand out DDD- loans? Th ebankers still get their commissions, promotions, and fees plus zero risk for them.


"There's never been a better time then now to be a banker."


~ Soweto & Yellen, LLC

robnume's picture

Why would it bother Codel? He knows that he can repo the house and keep the 3% down. What a scam.

i_call_you_my_base's picture

Or Wells can offload its inventory and leave Codel holding the bag.

brooklinite8's picture

Lets call that self help as a debtors prison or wealth transfer or bailin...

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) May 30, 2016 7:44 PM

Can my dog get a mortgage yet?  He's interested in an interest only, variable rate mortgate with 3-4% down.  There's a condo he'd really love to get his paws on.

ghostzapper's picture

No.  The state did not create a Certificate of Live Birth for the canine so consequently no security instrument exists to collateralize the dog's labor and energy.  

Pigeon's picture

I have no doubt the canine may apply under the "No Rapefugee Left Behind" mortgage clause. Documentation, schmokumentation.

cheeseheader's picture



Bestest reply yet....

J Pancreas's picture

that reminds me of a similar line in The Big Short. We're heading back there don't you worry!!

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) May 30, 2016 7:48 PM

If you really want to pull the rug out from this farce, pull the data on NYC home prices between 2000-2014.  It would appear from the NY chart that millienials are only slightly behind their 2000 counterparts, show what has happened to housing since that period and it'll fully explain why everyone is in their parent's basement.

i_call_you_my_base's picture

Right, even if they can get the 3%, it's not like they can afford the $4K / mo mortgage / property taxes.

HRH of Aquitaine's picture
HRH of Aquitaine (not verified) i_call_you_my_base May 30, 2016 8:26 PM

They don't know that, yet. They think owning a house is their birthright and they are living the dream promoted on HGTV (and other channels) 24/7/365.

As always, TV is nothing but a way to market ideas and stuff to a captive audience.

There is an old Latin saying: Buyer beware.

Nothing new under the sun. Not in several thousand years.

chunga's picture

Despite the super economic rebound, times are tough and people don't have very much money. The bankers dilemma in this situation is how do you steal money from people that don't have any.

Their answer is a simple one. Just *give* it to them* (as much as possible), then steal it from them later. Plus interest!

The bonus is...they'll throw the moral hazard card...then blame them...for being "reckless" and demand/receive a bailout!

*not actually give them money from their vaults or anything like that, simply conjure** it from the tribal money machine.

**it's god's work

Blankenstein's picture

The buyers are playing the game too, they share blame.  Without these enablers, the game wouldn't work.  

There are a lot of people who have owned for a long time, rent or buy what they can comfortably afford.  They are the victims - these taxpayers who pay for the bankers and those who buy more than they can afford because, darn it, they really want that HGTV dream home. 

cheeseheader's picture

They think owning a house is their birthright



Thanks, Willy Jeff.

ghostzapper's picture

In order to "create new money" the PDs just need that signature on the promissory note thus creating and authorizing a trustee (WF in this case) to debit the SECURITY of the PERSON held at the Federal Reserve.  All mortgages are fraud yet they are just using their PRIVATE CREDIT system as they see fit.  Who gives a shit if they are up to their eyeballs in debt the system MUST "create new money" to kick the can.  

Deposit that promissory note at the Fed and receive a credit from the Fed to the bank's account.  Create a new security obligation in the name of PERSON and charge them interest and fees for the term of the mortgage.  Rinse, repeat.

Omen IV's picture

The Fed has told them they will buy the paper - ECB is buying corp paper already and a lot worse  - Draghi is buying crap why shouldnt the Fed

Kido's picture

classic "the same shit is not gonna happen again"

Paul Kersey's picture

Wells Fargo already has them strapped with student loans, guaranteed by the Feds. Warren Buffet's bank. You know, that kindly old grandfather figure who serves as one of Obama's advisers. When will the public wise up to that corporatist oligarch?

gruden's picture

Then why do they bother?  I don't get it.  If they're already up to their eyeballs in student debt, what more is to be gained loaning them a mortgate?  I'd really like to understand the endgame from the bank's perspective.  It seems to me the young people are already hooked fishes at this point with debt that's already nearly equivalent to a mortgate. 

Gold Eyed Cat's picture

I don't know about your area, but here there are literally hundreds of foreclosed properties in a single zip code.  Go to Zillow and choose to view only "blue dots" (foreclosed houses) and you may be surprised.  Bankers gotta fill those houses with somebody!

Farmer Joe in Brooklyn's picture

This is the DIRECT result of the moral hazards created by the bailouts.

navy62802's picture

What the fuck ever. Rent the shit out of this market. Buy gold. Save cash. Wait for the apocalypse. That truly is the only place we are headed. Honestly, does it fucking matter if you own a condo when the apocalypse hits?

buzzsaw99's picture

Self-Help Ventures Fund decided to partner with Wells Fargo on insuring the 3% down mortgage program.

that's some funny shit right there.

nmewn's picture

The shit just falls outta the sky like Yellamanna! So insuring it really isn't an issue, it just takes moar Yellamanna!

Of course, moar Yellamanna only insures against bank loss so the shorts luv it too and we're gonna be just as sorrowful for the people put out onto the street and as the do-gooder Yellamanna lovers will be.

But...we will have been correct, again ;-)


chunga's picture

When money can be created at will, at least some responsibilty must come along with that, and dispensing it in ways clearly harmful to others is no good. I call it financial malpractice. Being able to bet against the whole scam is just wrong, and gross.

JailBanksters's picture

Well that's one way of securing more assets, might as well just hand the keys back now and save yourself a lot of trouble. They would only do this if they knew the ass was not going to fall out the real estate bubble, at least short term.

Cabreado's picture

A government wound up with money creators obviously can't work.

The cover provided by sheer scope and complexity and inertia runs its course...

And while it all crashes and burns in slow motion,
no one remembers how it was designed to work.

And a corrupt and defunct Congress is having a field day, at not only your expense, but the ultimate expense of the very Republic.

Go ahead now, and tell me how neglect of representation per design will lead you in a favorable direction.

Argue that your ignorance is not part of the problem.
Argue that your neglect of a corrupt Congress is not at the root of it.

"Happy" Memorial Day, so they say.

HRH of Aquitaine's picture
HRH of Aquitaine (not verified) May 30, 2016 8:20 PM

Anyone that deals with WF doesn't know that banks real name: We will Fuck you very hard and you will like it Bank.

God's picture

When GOD needed to mortgage heaven Wells Fargo was there to help.

God has spoken!

Miss Informed's picture

Lather, rinse, repeat

Northern Lights's picture

This is the same shit that brought the house down in 2008.  I thought it would not repeat itself.  Guess I was wrong.

yogibear's picture

Hey Millennials, Buffet already has you by the balls with student loans, next he wants to own you.

Buffet and the banksters way of owning you.

Dre4dwolf's picture

I have a solution.

Americans are born in America.

Its their country.

The land is American land.

The fed can just buy Millennials a home.

All the old people are going to die anyway, so what is going to happen? the land is going to sit there and belong to no one?

We are only here for a 100 years or so.... all ownership is transitory, the Fed can have the house back after the Millennials die and title can be re flipped to the next generation add-infinium.

We are going into an age of decreasing population soon, it shouldnt be a problem eventually there will be more empty homes than full ones anyway, the biggest generation in history is about to die " soon ".





Shed Boy's picture

Lets give it all back to the original "Americans"...the ones born here first. After all...they had it for at least  2,000 years before we came along.

bondman1's picture

WFC paid 100s of millions in fines for steering minorities into option ARMS in 2008. Self Help is a Durham NC finance company specializing in loans to the underserved including people of color. WFC now has cover to resume their "Dirt Loan" program. At least WFC isn't contributing to "Black Lives Matter"....oh, wait. They are:

Bounds's picture

Wells Fargo Home Mortgage campus in West DesMoines is awesome. Thousands of minions work there grinding out foreclosures or sending off the non-performing loans to FHA so they can collect the insurance, plus fees, plus escrow, plus you name it. Whatever the fuck they can add on. When the bad loans get to FHA they are turned over to HUD for bundling. The bundles of bad loans are then acutioned off to hedge funds at 50% of book. The hedge funds are forced to hang on to them for a year before foreclosing, after which the houses are cleaned up and flipped for a tidy profit (since they got them at 50%) or they hang on to them as over priced rentals. Nice racket they got there. Thieving bastards!

JamesBond's picture

What's the problem?  We know they can't pay it back and .gov will bail them out and they can keep the house.  It's not like we haven't seen this can kicking for decades now.  Farce and Fraud are the core of the United States.



Kasperfx's picture

their trying to dump their inventories on to the sheeple, theirs over 8 homes in my mom's 28 hom sub divisions that have been sitting vacant for the past 1/4 years,  the realtors tell everyone their short sales and wil be listsed/ available soon, this is years people been hearing this yet the homes just sit and have their grass cut onece a month to keep from geting fined 

kareninca's picture

Wells Fargo may offer this, but I don't think the Millenials will bite.  They are living too close to the edge already.  They understand how much they are saving by living with their parents; that they would be destitute if they were on their own.  The ones I know are just getting by, even w/o having to pay rent/mortgage.  They are not so stupid that they think they can afford a house, even with a low down payment.

RadioFlyer's picture
RadioFlyer (not verified) May 31, 2016 4:49 AM

Mort-gage....doesn't that translate to Death Pledge?