Wells Fargo correspondent to exit, shrink mortgage business, focus on bank customers and minority borrowers

Despite long being the #1 mortgage lender in the country, Wells Fargo has announced plans to shrink its mortgage business.

san francisco bank Told It will exit its correspondent lending business, focusing more on bank customers and minority communities.

Additionally, the company will reduce the size of its loan servicing portfolio, in which it collects monthly payments from home owners.

As a result, the company will significantly reduce its mortgage footprint, which was the largest prior to the increase. rocket hostage,

In the fourth quarter of 2017, quick loan seatless Wells Fargo and basically never looked back. they changed his name For Rocket Mortgage in May 2021.

Wells Fargo exits correspondent lending

First, Wells Fargo is exiting the correspondent mortgage lending business, which is basically the resale of their loan products by third-party companies like credit unions.

These smaller entities originate, underwrite and close mortgage loans before selling them to Wells Fargo Funding, according to their website. states,

per HMDA data richie mayWells Fargo funded approximately $228.6 billion in home loans in 2021 (the most recent year available).

Of that total, approximately $69 billion, or 30%, was through the correspondent lending channel.

It shows $11 billion, or five percent, originated through the wholesale lending channel, which is the reserve. mortgage broker partners.

but Wells Fargo had passed out Wholesale lending back in 2012, so it’s unclear whether this number is accurate.

In any case, they were the second largest mortgage lender in the United States in 2021 after $343 billion of rocket mortgages.

If we subtract the corresponding borrowings of $69 billion, they total about $160 billion. We can ignore the bulk numbers for now.

That would make Wells Fargo the fourth-largest mortgage lender behind Rocket, United Wholesale Mortgage and Chase.

So still quite large, even without the original 3rd party volume. But wait, there’s more.

Wells Fargo will focus on mortgage bank customers and minorities

while a cnbc Article indicated that Wells Fargo would “only make home loans to bank customers and minority borrowers,” which appears to be incorrect.

However, the company did say it “plans to build a more focused home lending business aimed at serving bank customers as well as individuals and families in minority communities.”

They also refer to this new strategy as a “smaller, less complex business”, which can be additional mortgage layoff and low loan amounts.

It’s unclear how much they plan to focus and/or downsize, but it’s clear they’re going to take a more calculative approach.

This mostly involves “optimizing” their retail team to focus on existing bank customers and under-served communities.

To this end, he will deploy additional home mortgage counselors to local minority communities, while investing $100 million to “advance racial equity in home ownership.”

The company will also expand its special purpose credit program (SPCP) that helps a minority of homeowners.

Wells Fargo noted back in April 2022 that it was the top mortgage lender to “black families” and the top refinance Lender to Black Homeowners.

In fact, in 2020 the company apparently made nearly the same number of home purchase loans to black families as the next three largest bank-lenders combined.

Can anyone still get a mortgage from Wells Fargo?

As mentioned, Wells Fargo announced plans to significantly downsize its home lending business.

Also, they will focus more on existing bank customers and minority communities.

However, that doesn’t mean you can’t get a mortgage from Wells Fargo if you don’t fit into the above categories.

This may mean that you will not receive incoming email or phone calls from home mortgage advisors at Wells Fargo.

This may also mean that those who fit into the above categories may be eligible for special offers and pricing from the bank.

Lastly, if you are an existing Loan Services customer, it is possible that your loan can be transferred to a new one. loan servicer,

So keep track of any changes to make sure future mortgage payments are in the right place.

Overall, this news doesn’t come as a huge surprise, given Wells Fargo’s struggles of late in the home lending space. alleged unfair lockout fee,

And given the overall climate in the mortgage space at the moment, it really isn’t surprising to see any company stepping back.

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