1. Instead of its previous goal of reaching as many Americans as possible, the company will now focus on home loans for existing bank and wealth management customers and borrowers in minority communities, CNBC has learned.
2. As part of its retrenchment, Wells Fargo is also shuttering its correspondent business that buys loans made by third-party lenders and “significantly” shrinking its mortgage-servicing portfolio through asset sales.
3. Altogether, the shift will result in a fresh round of layoffs for the bank’s mortgage operations, executives acknowledged, but they declined to quantify exactly how many jobs will be lost.
(End of direct quote from site)
While the lender pool is shrinking, there are lenders who are ready to do business and at great rates. All is well...
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
3y
@Patricia Steiner yeah, this isn't really a big surprise. All mortgage lenders know that profits rely in larger loans. And if you service an area "in need" not only does the government look at that favorable (they are the ones that run compliance, etc.) but sometimes those segments are "growing" segments. This is more of an announcement for shareholders. Shareholders have rights with publicly traded companies and they can control the value of the company as well. Since there is a lot of "uncertainty" in the mortgage world an announcement like this should be a positive sign to shareholders that the company is focused on profitable areas. Don't be surprised if stock prices go up from this announcement.
Oh, and just in case anyone is wondering - we do not use lenders like this as investors. Any large, national, publicly traded bank is completely out for what we do. We always rely on other real estate investors to provide us with referals that they have worked with or target smaller, more community based lenders. Those are usually more flexible to work with.
Actually, it's GroundHog Day with Wells Fargo...it's their MO. They did it in 2008 and they'll do it again. And, just last month, they had an unexpected expenditure:
"December 2022: The CFPB orders Wells Fargo to pay $1.7 billion in fines and $2 billion in consumer redress in connection with "illegal activity" across several of its product lines." (End)
My clients and I - all investors - use a variety of lenders depending on project size, rates, and terms which is commonplace. It's never good news to hear of a lender exiting; others will follow, some preceded their announcement. All in the ordinary course of business, it is...