Banking

Wells Fargo continues mortgage layoffs

Wells Fargo will lay off 107 workers at the end of August in Des Moines, where its home mortgage division is based. It was the company’s latest move in response to declining origination and refinance activity.

The bank hasn’t disclosed the number of impacted mortgage staff since it began layoffs in April, but said Wednesday that 35% of them have moved into other roles within the company. 

“The home lending displacements are the natural result of cyclical changes in the broader home lending environment, as has been acknowledged by most mortgage providers across the industry in recent weeks,” a spokesperson said in a statement.

At least 32 Wells employees in California and a total of 197 in Iowa have been targeted for layoffs, the company has disclosed in Worker Adjustment and Retraining Notification filings. The cuts in Iowa began in May and are taking place across five locations. The bank’s home mortgage division employs 13,000 workers in the Des Moines metropolitan area, the Des Moines Register, which first reported Wednesday’s WARN notice, said.

Wells cited the Mortgage Bankers Association’s June Mortgage Finance Forecast, which predicts total originations this year at $2.4 trillion, a sharp decline from last year’s record $4.4 trillion in originations. The lender also blamed declining refinance activity, down 78% from last year, according to the MBA’s Market Composite Index for the weekly period ending July 1.

In April, Wells reported a 33% year-over-year decline in origination volume in the first quarter to $538 million. The lender will disclose its second-quarter results July 15.

The pace of layoffs has sped up as mortgage firms reckon with a lackluster first half of 2022, mired by rising interest rates and prospective homebuyers’ affordability hurdles. Thousands of mortgage professionals working for lenders, servicers and technology providers have lost their jobs this year. And First Guaranty Mortgage Corp. in Plano, Texas, became the cycle’s first major casualty, filing for bankruptcy last week.

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