It’s a changing of the guard in the mortgage market.
Wells Fargo, once the dominant player in the market, continues retreating from the space. Wells Fargo wholesale stopped existing years ago, yesterday it was announced that they were shutting down correspondent lending as well.
The bank recently announced it will focus its mortgage business on serving existing bank customers instead of acquiring new customers. In addition, Wells Fargo will exit its correspondent business and reduce the size of its mortgage servicing portfolio.
This could mean lay-offs of Wells Fargo employees.
So what happened? A few factors led to Wells Fargo’s decision.
- First, the bank has been dealing with a number of legal issues.
- Second, the spike in interest rates has put a damper on the mortgage market.
- Third, a changing regulatory environment has added to the pressure.
The result is that nonbank players, such as local mortgage brokers, are now among the largest players in the mortgage business when taken together.
Primary Source: CNN.