Wells Fargo: Over 200 counties face housing trouble
NEW YORK, Feb 27 (Reuters) - Wells Fargo & Co (WFC.N), the second-largest U.S. mortgage lender, said it has identified more than 200 U.S. counties with troubled housing markets, showing how falling home prices and rising defaults are no longer concentrated in particular regions.
In a Feb. 25 document sent to wholesale brokers, San Francisco-based Wells Fargo said it has identified "soft," "distressed" or "severely distressed" housing markets in 24 U.S. states and Washington, D.C. Most of the markets are counties, while a handful are cities.
Wells Fargo is tightening its lending standards in the affected markets effective Feb 29, in many cases by limiting the maximum size of loans as a percentage of home values. In some markets, it will not allow prospective purchasers to borrow more than 75 percent of the value of their homes.
A spokeswoman for Wells Fargo Home Mortgage confirmed the document's contents. The company was not immediately available for further comment.
Lenders nationwide are tightening their loan standards because the housing market has deteriorated, and because there is little demand for many of the complex securities into which Wall Street once packaged many home loans.
In the document, Wells Fargo said California has at least 33 housing markets "at risk." Los Angeles county, San Diego county and at least 18 other counties face severe distress, it said.
Florida also has 33 at risk markets, followed by Michigan and Virginia with 15 each, and Maryland and Ohio with 13 each, Wells Fargo said.
Other at-risk markets include Arizona, Colorado, Connecticut, the District of Columbia, Illinois, Louisiana, Massachusetts, Minnesota, Missouri, Nevada, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Washington, Wisconsin and West Virginia, the document said.
Wells Fargo is also the fifth-largest U.S. bank. Last month, it said fourth-quarter profit fell 38 percent, the first decline in more than six years, as more people missed payments on mortgages and home equity loans. (Reporting by Jonathan Stempel; Editing by Derek Caney)
