Responsible lending - What It Means at Wells Fargo

U.S. residential real estate lending 

As one of America's leading residential real estate lenders, Wells Fargo knows that our customers have high expectations for us. We know that they expect more than just simple financing. They expect respect, reliable and knowledgeable service and support, - and most importantly, they expect us to be fair and responsible in our lending practices.

As an industry leader, we want to set an example. That's why we established a set of Fair and Responsible Lending Principles that span our full residential real estate lending process, from product development through our post-closing practices. These principles support Wells Fargo's vision to satisfy all our customers' financial needs and help them succeed financially.

We consistently follow business practices we believe serve the interests of our customers for the long term. We do not tolerate abusive, misleading or fraudulent lending practices. We expect responsible behavior from our team members and we assess and measure our performance against these goals. As a result, both customers and referral sources have rewarded us with their business over time, a result for which we are extremely proud.

Our Principles 

Three core principles serve as a practical guide for our practices and our teams. These principles for both loans and lines of credit are simple, straightforward, and consumer-focused, and serve as the compass which guides us every day.

Principle #1. The customer must have the ability to repay the loan according to its terms and conditions and the customer's financial circumstances. 

It seems simple, but it's not. We follow specific practices to ensure we assess the customer's ability to repay - for the good of the customer, our shareholders, and on behalf of our investors.

For both our direct and indirect channels, we:

• Do not grant credit based solely on the value of the home.
• Follow sound underwriting practices, ensuring that there is solid documentation and logic to support the customer's qualification for financing. 

Principle #2. The loan transaction must deliver a benefit to the customer. 

Again — it seems simple, but it's a smart and reasonable expectation on behalf of the customer. We look for demonstrable benefit to the customer such as:

• Helping them refinance from a variable to fixed interest rate product if that is the option they choose.
• Purchasing a home. 
• Helping them refinance to a lower interest rate, reduce the term, or lower the monthly payment - where the savings benefit outweighs the cost of refinancing. 

Principle #3. Support the customer's goal of making informed choices.

Every customer situation is unique — no two people's hopes, dreams, desires or challenges are the same. And, for most people, a home loan is one of the largest financial transactions they'll ever make. It's important therefore, that we do what we can to support them in making an informed choice. Specifically we:

• Understand that we serve a diverse population of customers with differing needs and circumstances - and therefore offer products with a wide range of terms and features to meet those needs. 
• Provide access to education, tools, and resources to help customers make fully informed decisions. 
• Make home loans and lines of credit available at competitive prices.
• Provide customers with complete, accurate, and easy-to-understand information about the terms, conditions, and costs involved in the transaction. 

In summary, these three simple principles — driven by common sense, good business practice and support for the customer's needs, guide us every day.

1. The customer must have the ability to repay the loan according to its terms and conditions and the customer's financial circumstances. 
2. The loan transaction must deliver benefit to the customer. 
3. Support the customer's goal of making informed choices.

But our obligation doesn't end when the loan closes. After closing, we service most of the loans that we originate along with loans originated by other lenders and our indirect lending channels. We cherish the customer relationships behind each and every one of these loans, hoping to earn the customer's business in the future.

That's why we extend the commitment we make to include servicing the customer responsibly through our Responsible Servicing Principles.