Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

Wells Fargo to shrink mortgage business, exit correspondent lending

Published 01/10/2023, 04:28 PM
Updated 01/10/2023, 06:17 PM
© Reuters. FILE PHOTO: A man uses an automated teller machine (ATM) at a Wells Fargo Bank branch on a rainy morning in Washington January 17, 2012.   REUTERS/Gary Cameron
WFC
-

(Reuters) -Wells Fargo & Co will slim down its home lending business by reducing its mortgage servicing portfolio and exiting the correspondent lending business, the company said on Tuesday.

“We are making the decision to continue to reduce risk in the mortgage business by reducing its size and narrowing its focus," Kleber Santos, the bank's chief executive for consumer lending, said in a statement.

Demand for mortgages and refinancing has weakened as U.S. interest rates climbed, making it more costly to buy homes.

The slowdown prompted Wells Fargo (NYSE:WFC) to cut thousands of jobs in is mortgage unit across the country last year.

The company will report fourth-quarter results on Friday. Analysts expect a profit of 62 cents a share, compared with $1.25 in the year ago quarter, according to data from Refinitiv.

© Reuters. FILE PHOTO: A man uses an automated teller machine (ATM) at a Wells Fargo Bank branch on a rainy morning in Washington January 17, 2012.   REUTERS/Gary Cameron

The bank also plans to invest an additional $100 million to advance racial equity in home ownership, it said.

In December, the U.S. Consumer Financial Protection Bureau hit Wells Fargo with its largest ever civil penalty as part of a $3.7 billion agreement to settle charges over widespread mismanagement of car loans, mortgages and bank accounts.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.