Wells Fargo mortgage staff braces are laying off as U.S. loan volumes tumble

November 3, 2022: -Mortgage volumes at Wells Fargo slowed in the latest weeks, leaving some workers idle and which sparks concerns that the lender will need to cut over employees as the U.S. housing slump deepens.

According to people with knowledge of the firm’s figures, the bank had 18,000 loans in its retail pipeline in the weeks of the fourth quarter. That is decreased by 90% from a year earlier when the pandemic-fueled accommodation boom was in full swing, stated that the people declining to be identified, which speaks about internal matters.

The U.S. housing market has been on a roller coaster in the latest years, taking off in 2020 thanks to easy-money policies, remote work adoption, and slowing down as the Federal Reserve boosted rates. Homebuyers have been squeezed, and the speed of refinancing has plummeted as buying costs surged to over 7% for a 30-year loan from regarding3% a year earlier. And rates may increase further as the Fed is expected to improve its benchmark on Wednesday.

The situation has the home loan industry, in which firms like Rocket Mortgage thrived on loan refinancings. It is expected to lead to consolidation among recently non-bank players that rushed to serve customers following most U.S. banks receding from the market.

Wells Fargo has been the most reliant on mortgages among the six biggest U.S. banks. But that has started to change under CEO Charlie Scharf, who has added that the bank is looking to shrink the business and focus primarily on serving customers.