Alt-A Borrowers Without Wells Fargo

Wells Fargo & Co. (WFC) is avoiding another type of mortgage designed for borrowers who can’t qualify for conventional home loans, further restricting the amount of money flowing into the troubled real estate market.

In a notice distributed Tuesday, Wells Fargo informed mortgage brokers that it is curtailing its exposure to so-called “alt-A” home loans – a product that typically doesn’t require borrowers to fully document their incomes.

The decision comes just a few days after Wells Fargo pulled out of the risky business of relying on brokers to finance “subprime” home loans for borrowers with bad credit records. Alt-A mortgages represent the middle ground between the subprime market and solid loans made to borrowers with stellar credit histories.