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Wells Fargo plans major retreat from mortgage business


Wells Fargo & Co. plans to shrink its vast mortgage empire, which once churned out one of every three home loans in the U.S. and for a time made the bank the most valuable in the nation, Bloomberg reported. Wells Fargo’s leadership is preparing a retreat that will probably start with the bank’s ties to outside mortgage firms that generated roughly a third of its $205 billion in new home loans last year. Down the road, the bank’s third-party servicing business — which oversees billing and collections for some $700 billion in loans made by other lenders — will also shrink. One area Wells Fargo will likely examine is servicing of Federal Housing Administration loans. Last month Wells Fargo reported a 53% year-over-year quarterly decline in net income, driven by lower mortgage originations amid increased interest rates. As reported in July by the Des Moines Register, Wells Fargo Home Mortgage has laid off about 200 employees from its West Des Moines operations since April.

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