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Wells Fargo & Company (WFC) - $25 value - yours FREE >>
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Wells Fargo & Company (WFC) - $25 value - yours FREE >>
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Wells Fargo (WFC) Reduces Mortgage Workforce on Strategy Rejig
Wells Fargo & Company (WFC - Free Report) has cut hundreds of jobs in its mortgage unit this week amid housing woes and the company stepping back from the mortgage business. This is in addition to thousands of job cuts done last year.
Per sources, the latest reductions have affected more than 500 employees, including mortgage bankers and home loan consultants.
Markedly, in early January, the company announced plans to create a more focused home lending business and exit the correspondent lending business and prune servicing portfolio. Management noted, “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,”
Regarding the job cuts, management remarked, “As part of these efforts, we have made displacements across our home lending business in alignment with this strategy and in response to significant decreases in mortgage volume in the broader market environment.”
Over the past six months, shares of WFC have gained 1.9% compared with a rise of 3.8% of the industry it belongs to.
Image Source: Zacks Investment Research
WFC currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Federal Reserve raising interest rates has battered the red-hot housing market. Lower industry volumes have also led to reductions.
WFC’s mortgage unit is not the only one facing the brunt of industry mayhem. In early February, it was reported that Wall Street biggie, JPMorgan Chase & Co (JPM - Free Report) , was letting go of hundreds of mortgage employees. JPM witnessed a 60% mortgage-origination volume slump last year.
Last November, Mr. Cooper Group (COOP - Free Report) laid off approximately 800 staffers. Per COOP’s management, “In the face of market volatility and economic uncertainty, Mr. Cooper Group has taken a disciplined and proactive step to scale back the Originations business, including the elimination of approximately 800 positions.”