Wells Fargo, once the nation's biggest mortgage bank, said it will step back from the market and cut thousands of workers, swelling a wave of industry layoffs as rising rates slow home purchases.
The bank announced it will only offer home loans to existing bank customers and wealth management customers, as well as borrowers in minority communities. The shift to pare down its mortgage business will result in a fresh round of layoffs in its mortgage operations. That comes on top of thousands of mortgage workers who were laid off last year as higher mortgage rates and regulatory pressures slowed the housing market.
The bank plans to exit its correspondent banking business that sells mortgages through third-party customers and significantly shrink its mortgage servicing portfolio through asset sales. The bank also announced it will invest $100 million to advance racial equity in homeownership, including strategic partnerships with non-profit organizations.
Wells Fargo (WFC) shares are down about 24% over the past year.