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Wells Fargo cutting 2,300 from mortgage division

  • Declining demand for refinancing has Wells Fargo (WFC) announcing more than 2.3K job cuts nationwide today. It's the 4th - and by far the largest - round of of cuts since June.
  • Included are 365 jobs in Birmingham, Alabama where employees were given 60 days notice today.
  • That the mortgage division is not doing great isn't new news (see Q2 earnings), and management insists as some divisions within the bank struggle, others improve.
  • Earlier: Continued soft refinance application numbers from MBA.
Comments (8)
  • Must be part of that housing recovery they keep talking about
    21 Aug 2013, 05:26 PM Reply Like
  • LOL. Who's heads need to roll is the execs. These TBTF banks should be split up and shut down and Glass Stegall implemented again. I wonder how much they will want in bailout from the taxpayer during the next major crash? Then they'll make it back by charging 18% interest on their credit cards while borrowing at 0% from the Federal Reserve and hoping depositors will go away so they don't have to pay CD and deposit interest.
    22 Aug 2013, 02:01 AM Reply Like
  • Lol @june1234... Casualities of capitalism
    21 Aug 2013, 09:18 PM Reply Like
  • Not sure if my anecdote helps but lemme tell it anyway.

     

    Got my place in March 2012, and Wells bought the mortgage. A year later I shopped around and was able to reduce my rate by another .75%.

     

    I found another lender that had that rate and then called both the national Wells office and my local rep, and asked if they could match it, since it would just be more convenient to keep my account with them. Other friends had done this with Wells in the past so I thought this would be a no brainer.

     

    But Wells didn't want to match the low rate so I ended up switching to another lender.

     

    At the time I thought this was bad business. Maybe someone in the industry can chime in and explain if it was better for Wells to close the note out for cash to another lender, but in the long run they are missing out on a very low risk cash flow from me so I didn't think this made the most sense for them, but have no idea how that business works from the institutional side.
    22 Aug 2013, 02:48 AM Reply Like
  • Ditto on your story - - I also went with another lender (credit union) for a lower rate because WFC would not negotiate the rate - - Their loss of a good customer and future interest payments - - I do not remember exactly but perhaps they had sold my loan to another company and now were only just servicing the loan for the other company? At that point they would have no incentive to negotiate a new loan - - Also as a side note - - Interest rates are currently starting to make steps upward both on loans and CD's
    23 Aug 2013, 01:10 PM Reply Like
  • Interesting revelations that pertain to refi activity. Given the lowest mortgage rates of all time, it would seem that a sustained period of higher rates would need to exist (and it follows that a sufficiently large quantity of new mortgages with higher rates coincide) to create a new refi wave.
    Are we in a unique time period where rates are 'trapped' by decreasing median income and demand ramifications? Over the last 50 years, refi waves took place as a function of boom/bust/boom/bust activity. It may take a period greater than 5yrs(perhaps that's optimistic), and even extending out to 7yrs or so. Note that rates need to escalate to such a point that a refi makes economic sense to the average consumer. (I'm not considering the HARP or HAMP type programs, but 'normal' types of mortgage activity).
    The savings accrued to a major lender that correctly bets that this is the case, could be worth billions in wage and ancillary cost savings. Of course, it also is a clear 'tell' that we are miles away from 'the way we were.'
    22 Aug 2013, 09:49 AM Reply Like
  • workers today are treated like used toilet paper. Execs are rewarded with double digit pay packages, outrageous stock awards while workers dumped to scrounge and find another slave position. The future is quite gloomy for many peons. the gap between the haves and have nots is accelerating.
    22 Aug 2013, 09:54 AM Reply Like
  • In a press release earlier today, WFC reported:

     

    "Wells Fargo & Co. (WFC) announced today that the company has reported consumer relief and refinance credits totaling $4.4 billion as of June 30, 2013 to the Office of Mortgage Settlement Oversight. Under the terms of National Mortgage Settlement, Wells Fargo committed to provide $4.3 billion in consumer relief and refinances for its customers."

     

    This was followed immediately by announcement of the mortgage division's 2,300 layoffs. (One and done?)

     

    It could be just coincidence, but it looks like anyone who received mortgage relief from WFC in the last year can thank the pressure from the Office of Mortgage Settlement Oversight.
    22 Aug 2013, 10:25 AM Reply Like
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