It’s more likely a recognition of adverse selection in anyone seeking a loan now than a particular opinion about housing values. Under basically no point does

It’s more likely a recognition of adverse selection in anyone seeking a loan now than a particular opinion about housing values. Under basically no point does Wells Fargo want to foreclose on a house. They will get pennies on the dollar for it independent of macro price differences. So in analyzing risks a 10% increase in foreclosures is going to weigh dramatically more than a 10% decrease in home values.