Wells Fargo to step back from its dominating mortgage lending position - report

Aug. 15, 2022 9:13 AM ETWells Fargo & Company (WFC)By: Liz Kiesche, SA News Editor10 Comments

Wells Fargo (NYSE:WFC) is planning to dramatically reduce the size of its mortgage lending business, Bloomberg reported Monday, shedding its commitment to be No. 1 in the business almost three years after Charlie Scharf took over as CEO and as the bank tries to get into regulators' good graces.

The effort is likely to begin with severing ties to outside mortgage firms that produced about a third of its $205B in new home loans last year, Bloomberg said, citing people familiar with the business.

With the change, Wells Fargo (WFC) is likely to focus on lending to existing customers or in places where it's already present.

The shift is likely to include paring or potentially stopping so-called correspondent mortgage lending, a business in which Wells Fargo (WFC) provides funding for loans that are arranged by outsiders, the people told Bloomberg.

The mortgage business is already suffering from lower volumes as interest rates increase. During such downturns, staffing in the mortgage business normally are cut. With the change in focus, Wells Fargo (WFC) will make deeper cuts, Bloomberg said.

In September 2021, Wells Fargo (WFC) was fined $250M for deficiencies in its home lending loss mitigation program.

Previously (July 15), Wells Fargo (WFC) Q2 earnings decline hurt by VC, mortgage, investment banking

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