Wells Fargo contends with end of a refinancing boom that helped push profits to a record. Photo / Getty
Wells Fargo contends with end of a refinancing boom that helped push profits to a record. Photo / Getty
Wells Fargo is cutting 638 mortgage employees as the nation's largest home lender contends with a slowdown in the business.
"After carefully evaluating market conditions and consumer needs, we are reducing to better align with current volumes," Wells Fargo spokesman Tom Goyda said in an emailed statement.
As interest ratesrise, Wells Fargo is contending with the end of a refinancing boom that helped push profits to a record. In the second quarter, mortgage fees declined by a third to the lowest in more than five years. Chief executive officer Tim Sloan warned investors of "overcapacity" in home loans at a May conference.
The company is cutting in states including California, Florida, North Carolina and Colorado. The Orlando Sentinel reported earlier on the decision.
The San Francisco-based bank is also navigating under a punitive growth ban from the Federal Reserve. Expense reductions to the tune of US$4 billion ($5.9b) by the end of next year and a shift to higher-yielding products such as credit cards are part of Wells Fargo's strategy to boost profitability while growth is restricted.
