Wells Fargo’s net earnings dropped in Q4 2022, pushed down by a settlement and the pressures of a shrinking economy. The bank announced that its net income fell to $2.86 billion, or 67 cents a share. This is half of its profits from the same time last year, which came in at $5.75 billion, $1.38 per share. Leaders at Wells Fargo noted that the decline was driven by the fall-off in mortgage demand. Its home lending was down 57% from Q4 2021. The bank announced this week that it is narrowing its home lending business, exiting the correspondent lending channel and shrinking its servicing portfolio. This move will force a round of layoffs, but it is unclear how many jobs…
By KIMBERLEY HAAS Leaders at Wells Fargo announced this week that they are reducing their home lending footprint and some people are saying it may be big news in the lending space, but will likely not make much of a difference to the average consumer. It was announced Tuesday that the company, formerly the nation’s largest mortgage lender, is exiting the correspondent lending channel and shrinking its mortgage servicing portfolio. Plans are to focus on serving bank customers and members of minority communities. Lawrence White, a professor of economics at the New York University Leonard N. Stern School of Business, sat down with the Mortgage Note to talk about the news on Wednesday. White said he hopes the move by leaders at…
Wells Fargo is reducing its home lending footprint, a move that experts say will have major ramifications in the mortgage industry. Formerly the nation’s largest mortgage lender, the bank announced Tuesday that it is exiting the correspondent lending channel and shrinking its mortgage servicing portfolio. “We are making the decision to continue to reduce risk in the mortgage business by reducing its size and narrowing its focus,” Kleber Santos, CEO of Consumer Lending, said in a statement. The company’s correspondent arm accounted for 42% of its loan originations in Q3 2022. Demand is down across the country due to affordability issues and high mortgage rates. Lenders are seeing originations shrink, resulting in closures and layoffs. Wells Fargo has suffered the…
Kristy Fercho has been named Well Fargo’s new head of Diverse Segments, Representation, and Inclusion, the bank announced in a press release. She is succeeding Kleber Santos, who is transitioning to CEO of the bank’s Consumer Lending Business. Fercho is being promoted from her position as head of Wells Fargo Home Lending. In her new position, she will integrate diversity, equity, and inclusion into the various aspects of Well Fargo’s business, and deliver marketplace and workplace outcomes. “Our work on diversity, equity, and inclusion is a long-term commitment, and we will continue to advance it under Kristy’s leadership,” said Wells Fargo CEO Charlie Scharf. “Her deep business experience, including her most recent role as head of our Home Lending business,…
By TYRONE TOWNSEND and KIMBERLEY HAAS Wells Fargo leadership has laid off employees in a move that is being blamed on a dramatically smaller originations market. In a statement to The Mortgage Note, Spokesperson Jennifer Langan said the latest Mortgage Bankers Association forecast has total originations for 2022 at $2.4T, down 40% year-over-year, with refinances down over 70%. “The home lending displacements are the natural result of cyclical changes in the broader home lending environment, as has been acknowledged by most mortgage providers across the industry. Employees affected by these changes have each been an essential part of our success. We are carrying out displacements in a transparent and thoughtful manner and providing assistance, such as severance and career counseling,”…
By CHUCK GREEN Alleged bad behavior and fraudulent activity in the mortgage industry have made news headlines in recent years and despite attempts to get lending leaders to shape up their ships, at least one person who reports on these issues says problems are common, even “rampant.” One of the most recent examples of these alleged incidents involved sham job interviews for Black and female candidates at Wells Fargo & Company. Wells Fargo in California has approximately $1.9 trillion in assets. They serve one in three U.S. households and more than 10% of small businesses in the United States. According to former executive Joe Bruno, company leaders at Wells Fargo allegedly put minority candidates through the interview process for positions…
By KIMBERLEY HAAS At least four industry leaders will cover the travel expenses for employee abortions after the U.S. Supreme Court overturned Roe v. Wade on Friday. The New York Times named Bank of America, JPMorgan Chase, Wells Fargo, and Zillow in a Tweet on Monday. There were 4,307 Retweets, 705 Quote Tweets, and over 17,300 Likes as of Tuesday morning. The media relations departments at Bank of America and JPMorgan put out press releases about their stress test results on Monday. Bank of America announced plans to increase its quarterly common stock dividend beginning in the third quarter of 2022. “Our responsible growth strategy over the last decade has put us in a strong position to support our clients…
By CHUCK GREEN An apparently not so uncommon sight these days in the mortgage industry: empty desks. Not that their occupants are taking five for a foam latte. Instead, they might well have either been steeped in the pink slip blues or were compelled to submit their resignation. Over the past three months in the industry, there have been more than 3,500 job cuts, according to globalsg.com. In February, Bloomberg reported U.S. home mortgage lenders might have no other choice during the coming months that to initiate layoffs. Similarly, earlier this month, wolfstreet.com reported that not only are layoffs among mortgage lenders taking place, but they will also continue. “Layoffs and forced resignations are certainly imminent in the mortgage banking…
By KEVIN B. KIMBLE Editor’s Note: This article was written by a contributor and contains the individual’s views, opinions, or personal experiences. The Biden administration recently unveiled an action plan to address racial bias in home appraisals and other areas of the American housing system. As new research from Zillow shows, this couldn’t come at a better time. Zillow found that there is a widening mortgage approval gap along racial lines. Specifically, Black applicants are denied a mortgage at a rate 84 percent higher than white applicants. This figure has been worsening, representing an increase of 10 percentage points since 2019. The approval disparity has contributed to declining Black homeownership, a crucial aspect of wealth building. The negative trend in Black mortgage denials is…
By KIMBERLEY HAAS United Wholesale Mortgage turned heads in the industry last week when it was reported that health officials are investigating the company after receiving complaints about how they are handling COVID, which lead some people to ask why employees in lending are expected to be in their offices to begin with. Michigan Occupational Safety and Health Administration Director Bart Pickelman confirmed to The Mortgage Note Wednesday that his agency has received 50 complaints against UWM since November 1, 2021. “MIOSHA currently has one open investigation and other investigations that are currently progressing through the appeals process. MIOSHA cannot provide information on an open investigation,” Pickelman said. A former employee told Fox 2 in Detroit that people who work at…
