Wells Fargo mortgage staff prepare for layoffs as U.S. lending crumbles

mortgage volume wells fargo A further slowdown in recent weeks has prompted fears that some workers will be furloughed and lenders will have to cut more staff. US housing downturn Deepen.

About 18,000 loans were made in the bank’s personal lending pipeline in the first few weeks of the fourth quarter, according to people with knowledge of the firm’s numbers. This is a 90% decrease for him over the previous year. covid pandemicThe housing boom is in full swing, according to people familiar with the matter, who asked not to be identified.

The US housing market has been on a roller coaster in recent years, rising in 2020 on the back of easy money policies and the adoption of remote work, and slowing this year. federal reserve Raise the rate.home buyers Squeezed The pace of refinancing plummeted as borrowing costs for 30-year loans surged from about 3% a year earlier to more than 7%.and the price is climb further As Federal Reserve Expected to Raise Benchmark Rates See you Wednesday.

This situation is putting pressure on the mortgage industry, especially companies like: rocket mortgage prospered by refinancing loans, Consolidation among new non-bank players After most US banks withdrew from the market, they rushed to serve their customers.

Of the Big Six banks in the United States, Wells Fargo has historically been the most reliant on mortgages.But that started to change under CEO Charlie Scharfwho said the bank was looking for Shrink It is primarily focused on serving existing customers.

early warning

bank in October warned investors After saying mortgage originations fell nearly 60% in the third quarter, he said the housing market could slow further.

“We expect the short term to continue to be challenging,” Chief Financial Officer Mike Santomassimo told analysts on Oct. 14.

Employees are nervous after the bank I started Staff cuts and internal forecasts for April show more turnover.Local news outlets say the Wells Fargo office requirement Disclose impending layoffs in local government.

The number of mortgage officers is expected to fall to less than 2,000 from more than 4,000 at the beginning of the year, one of the people said. Many salespeople say he hasn’t closed a single loan in recent weeks, the person said.

Another person said most exits were voluntary as bankers sought other opportunities, making retirements and staffing less predictable.

“Our recent changes are a result of the broader interest rate environment and are consistent with the reaction of other lenders in the industry,” a Wells Fargo spokeswoman said in a statement. “We regularly review and adjust our staffing to match market conditions and business needs.”

The bank said last month its total workforce fell by about 14,000 people Headcount decreased 6% to 239,209 in the third quarter.

Wells Fargo shares are down about 2% year-to-date.

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