This new program, yourFirstMortgage, quickly became popular among first-time buyers.
"In addition, we launched yourFirstMortgage, a new home loan program to help more qualified first-time homebuyers and low- to moderate-income consumers become homeowners,” Wells Fargo shared on its earnings call on Friday. “Early reaction to this program has been positive with over $1 billion of applications in the first 30 days."
Wells Fargo reported on Friday that applications increased to $95 billion for the second quarter of 2016.
Dividing that number into three, and assuming the bank had about the same amount in applications each month, yourFirstMortgage made up about 3% of total loan applications in the program’s first month.
The success of the program is good news for many other banks, as other lenders also have their own version of the 3% down, or less.
Recently, the City of Chicago and Chicago Infrastructure Trust helped bring more Chicago residents into homeownership through a 1% down payment loan. The homeowner assistance program currently has five banks in their lender program including Guaranteed Rate, American Financial Network, Home Trust Mortgage, Pacor Mortgage Corp. and Wintrust Mortgage.
Wells Fargo's 3% down program, as well as other decisions the company made this quarter, seem to be having a positive impact. With mortgage rates near all-time lows, many banks are struggling to balance volume with profitability, but Wells Fargo’s earnings reports were in line with Capital IQ Consensus at $1.01, and its revenues rose 4% annually.