Wells Fargo, once the leader in home mortgages, has announced a shift to a more focused home lending business aimed at serving bank customers, as well as individuals and families in minority communities.
According to a company release, Wells Fargo is exiting the Correspondent business and plans to reduce the size of its Servicing portfolio.
“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,” said Kleber Santos, CEO of Consumer Lending. “As the largest bank lender to Black and Hispanic families for the last decade, we remain deeply committed to advancing racial equity in homeownership.”
Specifically, Wells Fargo has made a commitment to:
- Optimize the Retail team to focus primarily on bank customers and underserved communities
- Broaden existing $150 million investment from the company’s Special Purpose Credit Program (SPCP) to include purchase loans, given the current market environment
- Invest an additional $100 million to advance racial equity in homeownership, including strategic partnerships with non-profit organizations and community-focused engagements
- Deploy additional Home Mortgage Consultants in local minority communities
“We will continue to expand our programs to reach more customers in underserved communities by leveraging our strong partnerships with the National Urban League, UnidosUS and other non-profit organizations,” said Kristy Fercho, head of Home Lending and head of Diverse Segments, Representation and Inclusion at Wells Fargo. “We also will hire additional mortgage consultants in communities of color.”
Amid shrinking demand for home loans, Wells Fargo made numerous cuts to its mortgage division throughout the latter half of 2022. As recently as December, hundreds of employees were reportedly laid off from the mortgage division of the bank.