By Yasin Ebrahim
Investing.com -- Wells Fargo (NYSE:WFC) is retreating from its mortgage business to create a more focused home lending business at a time when rising interest rates have dampened mortgage demand.
The company will now offer home loans only to existing customers as well as individuals and families in minority communities. The bank also said it would also step away from its correspondence business that sells mortgages through third-party firms.
The decision would “continue to reduce risk in the mortgage business by reducing its size and narrowing its focus," Wells Fargo said.
The move comes amid a jump in interest rates that has wreaked havoc on mortgage and refinancing demand.
Mortgage application volume fell 13.2% for the week ended Dec. 30, from two weeks earlier, according to the Mortgage Bankers Association’s seasonally adjusted index.