Wells Fargo cuts 140 positions from correspondent lending staff
Wells Fargo handed 140 pink slips to employees in its Springfield, Illinois office in mid- January, according to a Worker Adjustment and Retraining Notification (WARN) filed with the state.
Personnel impacted by the layoffs were part of the bank’s correspondent lending team and were a result of Wells Fargo exiting that channel, a spokeswoman from the California-based bank confirmed.
The reduction, first reported by The State Journal-Register, took place on Jan. 11, a day before the bank officially announced its exit from correspondent lending and its plans to reduce its servicing portfolio. Per the publication, severance and career assistance was provided to impacted employees.
Plans for a mortgage pullback have been in the works since last year, with a Bloomberg report in August noting that Wells Fargo was in the midst of shrinking its vast mortgage empire.
In announcing its exit from the correspondent channel, the depository noted that the measure will help to “reduce risk in the mortgage business by reducing its size and narrowing its focus.” A company spokesperson declined to give a timetable for winding down its correspondent lending channel or reducing its servicing portfolio.
Analysts have said that the bank’s decision to exit correspondent lending and reduce the size of its mortgage servicing portfolio will have residual effects on both segments, as well as on the secondary market. And as the top-ranked mortgage lender withdraws from a portion of the mortgage business, some have wondered who will step in to fill the void.
In the meantime, Wells Fargo is turning its attention to “serving bank customers, as well as individuals and families in minority communities.”
One such initiative is broadening its Special Purpose Credit Program. The bank’s SPCP, which initially included a $150 million investment to refinance loans for minority homeowners, will now include purchase loans. The bank is also in the process of hiring additional mortgage consultants in communities of color.