The inevitable part of Wells Fargo’s exit from substantial parts of the U.S. mortgage market has arrived. The bank announced it laid off hundreds of mortgage bankers as part of its strategic shift.
The layoffs included some of Wells Fargo’s top producers, including bankers who surpassed $100 million in loan volume in 2022. This included top earners who less than a month before the layoffs were flown to a Palm Springs, Calif., resort as a reward for their accomplishments.
A Wells Fargo spokesperson said the bank communicated with affected employees, provided severance and career guidance, and tried to retain as many workers as possible.
“We announced in January strategic plans to create a more focused home-lending business,” the spokesperson said. “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.”
Under CEO Charlie Scharf, Wells Fargo is pulling back from parts of the U.S. mortgage market, which it once dominated. Instead of seeking to maximize its share of American home loans, the bank is focusing mostly on serving existing customers and minority communities.
The shift comes amid higher interest rates which have led to a sharp decline in loan volume and on the heels of a record-setting $3.7 billion fine the bank agreed to pay the Consumer Financial Protection Bureau following allegations of consumer abuses tied to mortgages, auto loans, and overdraft fees.