Wells Fargo confirms mortgage staff layoffs
Wells Fargo confirmed on Friday that it was laying off an undisclosed number of mortgage lending employees due to mortgage market conditions, a week after reporting a significant drop in origination volume.
The bank, in a brief statement, did not specify which employees were affected or how many employees were displaced, and did not immediately respond to follow-up questions Friday afternoon.
It is the third major mortgage lender this week to announce cuts in response to falling mortgage volumes, after beleaguered lender Better.com and technology company Blend.
“The shifts in home lending this week are the result of cyclical shifts in the broader home lending environment,” the bank said in a statement. “The employees affected by these changes have each played a vital role in our success. We make moves transparently and thoughtfully and provide assistance, such as severance packages and career advice. »
Wells in an earnings report last week showed a 33% drop in origination volume, plummeting CEO Charlie Scharf said it was “one of the biggest quarterly declines I can remember.” The bank’s original net income fell to $538 million in the first quarter of 2022 from $1.38 billion in the same period last year. While the lender reported positive management revenue from a net loss a year earlier, its mortgage banking revenue in the first quarter of 2022 was only half the amount it made in the first quarter of last year. .
Reports of the layoffs first appeared on social media, where posts said the cuts included 550 mortgage processors.
A number of mortgage companies have laid off employees in response to the end of the refinancing boomwith Blend cutting 10% of its employees and Better.com losing more than a third of its entire workforce in a series of major layoffs. Penny Mac, Performer and Guaranteed rate have also reduced their workforce in recent months.
Wells has also come under fire in the past two months over allegations of discrimination in handling refis from black landlords. The bank is under intense scrutiny from New York City and Capitol Hill officials, and responds to two federal class action lawsuits.