Despite being the nation’s No. 1 mortgage lender for a long time, Wells Fargo has announced plans to shrink its mortgage business.
bank in san francisco say will leave the loan agency business while focusing more on banking customers and minority communities.
In addition, the company will reduce the size of the credit service portfolio. In which the company will collect a monthly payment from the homeowner.
As a result, the company will significantly reduce its mortgage footprint. which was the largest before the increase rocket mortgage.
Wells Fargo Exits Consistent Lending
First things first, Wells Fargo is exiting the mortgage lending business, which is basically the reselling of their loan products by third-party companies such as credit unions.
These smaller entities “initiate, underwrite, and close mortgages before selling them to Wells Fargo Funding,” their website says. state.
According to HMDA data from Richie MayWells Fargo is funding approximately $228.6 billion in home loans in 2021 (the last year available).
Of that total, about $69 billion, or 30%, came from journalistic lending channels.
It showed another $11 billion, or 5 percent, came from wholesale lending channels reserved for mortgage broker alliance
But Wells Fargo has leave Wholesale lending was in 2012, so it’s unclear if the numbers are accurate.
in any case They are the second largest mortgage lender in the United States in 2021 behind Rocket Mortgage at $343 billion.
If we subtract the $69 billion in correspondent loans. The total would be reduced to approximately $160 billion. We can ignore wholesale figures for now.
That would make Wells Fargo the fourth-largest mortgage lender behind Rocket, United Wholesale Mortgage and Chase.
So it’s pretty big even without third-party origination volumes. But wait, there’s more.
Wells Fargo Mortgage focuses on banking and minority customers.
while CNBC article It states that Wells Fargo will “only provide home loans to bank customers and retail borrowers,” which appears to be incorrect.
However, the company said “There are plans to create a more focused home loan business aimed at serving bank customers. as well as individuals and families in minority communities.”
They also refer to this new strategy as a “small and less complex business” which may be spelled more mortgage layoffs and a decrease in the amount of credit
It is unclear how much they plan to get and/or get smaller. But it is clear that they will use a more computational approach.
which includes “Optimizing” the retail team to focus on existing bank customers and largely underserved communities.
As a result, they will deploy additional home mortgage counselors in local minority communities. while investing $100 million “to advance racial equality in home ownership.”
The company will expand the credit project for special purposes (PWR) to help minority homeowners
Wells Fargo noted back in April 2022 that it was the top mortgage lender for “black families” and the top. refinance Lender for Black Homeowners
In fact, as of 2020, the company has apparently extended home equity loans to black families by roughly the same amount as the next three largest bank lenders combined.
Can anyone still get a mortgage from Wells Fargo?
As mentioned, Wells Fargo announced plans to drastically reduce the size of its home loan business.
meanwhile They will pay more attention to existing bank customers and minority communities.
However, that doesn’t mean you can’t get a mortgage from Wells Fargo if you don’t fit into the above categories.
It may mean that you won’t receive an email or phone call from a home mortgage advisor at Wells Fargo.
It could also mean that people who meet the above categories may be eligible for special offers and pricing from banks.
Finally, if you are already a customer who offers credit services. It is possible that your credit may be transferred to a new customer. credit service.
So keep an eye on the changes to ensure future mortgage payments are sent to the right place.
All in all, this news is not a surprise, as Wells Fargo has struggled with late-stage mortgage lending, including Allegedly improper lock value.
And considering the overall weather in the mortgaged area right now It’s not a shock to see any company downsizing.