Wells Fargo confirms mortgage layoffs as rates climb

  • Wells Fargo has cut jobs in its home lending operations, Insider has learned.
  • Wells mortgage income fell 33% between the first quarter of 2021 and 2022, the bank reported in April.
  • The cuts come as the average 30-year fixed mortgage rate hits its highest level since 2010.

Wells Fargo, the nation’s largest home lender among

American banks

began laying off its mortgage staff after reporting a sharp drop in home loan revenue in the first quarter of 2022, Insider has learned.

News of the job cuts was first seen on job-sharing website The Layoff, where several posters complained of layoffs from the bank’s mortgage operations teams, which include loan processors. loans and subscribers.

Wells Fargo confirmed on Friday that there had been layoffs within its home loan operation, but declined to elaborate on the extent of the cuts.

“We conduct moves in a transparent and thoughtful manner and provide assistance, such as severance packages and career counselling. Additionally, we are committed to retaining as many employees as possible and will do all we can to help them identify other opportunities within Wells Fargo,” a Wells Fargo spokesperson said in a statement provided to Insider.

Posts on The Layoff, however, suggest the Wells Fargo layoffs hit mortgage teams in at least five US cities, including markets in Phoenix, Des Moines, and San Antonio, as well as Portland, Oregon, and Raleigh. , North Carolina.

“It was reported this afternoon that some Agency processors, underwriters and managers have been terminated,” an anonymous poster wrote on Thursday.

“Processing, underwriting and credit administration teams have been advised that ‘their position will be terminated due to mortgage market developments’. They have been given 2 weeks notice,” another poster read.

Wells Fargo, in confirming the cuts, blamed the sharp drop in home mortgages as the Fed raises interest rates to fight inflation. In recent weeks, average 30-year fixed mortgage rates have reached those last seen in 2010, above 5%.

“The home loan shifts this week are the result of cyclical changes in the broader home loan environment. The employees impacted by these changes have each been a critical part of our success,” Wells Fargo told Insider.

In April, Wells Fargo reported that home loan revenue fell to $1.5 billion in the first quarter of 2022, down 33% from the same period in 2021 and 19% from the fourth quarter of last year.

“We believe the mortgage market experienced its largest quarterly decline since 2003, primarily due to lower refinancing activity in response to rising mortgage rates,” Wells Fargo chief financial officer Mike Santomassimo told reporters. analysts during the bank’s quarterly earnings call in April.

“We have begun to reduce spending in response to lower volume and expect spending to continue to decline throughout the year as excess capacity is removed and aligned with lower business activity” , Santomassimo also told analysts.

Wells Fargo wasn’t the only mortgage company hit by rising rates and pressure on home loan volumes.

Tuesday, Housing Wire reported this technology startup Blend, which exploits the technology used by the main

mortgage lenders

including Wells Fargo, had laid off 10% of its staff. Also on Tuesday, mortgage startup Better, which has been beset by controversy since it began downsizing last December, also announced it was pursuing a new round of mass layoffs, TechCrunch reported. The job cuts came after Better laid off thousands of employees in March.

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