Aram Zucker-Scharff

Despite the surge in “seasonally-adjusted new home sales”, un-seasonally-adjusted mortgage applications tumbled 8.5% this week, the biggest drop in 3 months as the modest January bounce has been almost entirely unwound. This pushes the broad MBA mortgage applications index down to near its lowest in 14 years. However, the home-purchase index continues to collapse. Purchase applications are down 30% from their May highs plunging in the last few weeks to their lowest level since 1995.

Is Wells Fargo getting back into subprime mortgages? Yes:

Wells Fargo is once again setting sail on subprime mortgage waters, despite how choppy they were several years ago. The bank will now consider mortgage applicants with credit scores as low as 600.

The “We didn’t learn anything edition:” Wells Fargo returns to subprime mortgages. The bank, which absorbed Wachovia, a company nearly destroyed by subprime lending, will consider mortgages to those with 600-649 credit scores (the official subprime range). Reports also state that lending is considered to those whose credit score is as far down as 500. Terrifying.