Wells Fargo, once the nation’s largest home lender, says it is scaling back its mortgage operations.
The bank — which has its east coast headquarters in Charlotte — is getting out of the correspondent mortgage business. That's when a bank underwrites loans for third-party lenders. It's also reducing its mortgage servicing division.
Instead, Wells Fargo will focus on loans for minority home buyers.
“Mortgage is an important relationship product, and our goal is to continue to be the primary mortgage lender to Wells Fargo bank customers as well as minority homebuyers. We are making the decision to continue to reduce risk in the mortgage business by reducing its size and narrowing its focus,” Kleber Santos, Wells Fargo’s CEO of Consumer Lending, said in a statement. “As the largest bank lender to Black and Hispanic families for the last decade, we remain deeply committed to advancing racial equity in homeownership.”
Most of Wells Fargo's mortgage business is based in Des Moines, Iowa. It's not clear if the changes will lead to job cuts. The bank laid off more than 400 people in the division last year, as rising interest rates led to a decline in home purchases, according to the Des Moines Register.
In December, the Consumer Financial Protection Bureau slapped Wells Fargo with a nearly $4 billion dollar fine for misapplying loan payments and wrongfully foreclosing on homes.
