Skip to main content

Once upon a time, it was more or less Wells Fargo’s entire business model to accumulate accounts at essentially any cost—and the cost was, indeed, significant, in more ways than one. Now, it is more interested in getting rid of as many accounts and customers as possible. And that includes the bank’s former pride and joy, its once market-leading mortgage business. And so, if for some reason you would like a home loan that comes with all sorts of improper extra costs and a higher likelihood of an improper foreclosure, you’re out of luck—even if you aren’t Black.

Its executives are sketching plans that would curb new lending and related businesses such as loan servicing. One senior executive said it would be surprising if Wells Fargo’s mortgage business ends up as large as what JPMorgan Chase & Co.’s is today.

Well, that’s definitely one way Charlie Scharf can make himself feel a bit more at home at Wells.

Retrenching will almost certainly include paring, or potentially even halting, so-called correspondent mortgage lending, in which Wells Fargo provides funding for loans arranged by outsiders, the people said…. A concern inside Wells Fargo is that when it finances large amounts of loans from other firms, it’s on the hook for any reputational damage if problems later surface….

Down the road, the bank’s third-party servicing business — which oversees billing and collections for some $700 billion in loans made by other lenders — will also shrink…. In one sign of the firm’s evolving philosophy, executives are already under orders to improve handling of applications from existing consumer-banking and wealth-management clients, rather than refer them to the same system used by non-customers.

These plans, such as they are, will also—along with the general inflation-induced slowdown in the mortgage business—help Wells out with its headcount problem.

Job cuts inside Wells Fargo are already underway as the Federal Reserve’s interest-rate hikes slow applications. Insiders acknowledge those headcount reductions ultimately will go deeper as the firm recalibrates its size.

Wells Fargo Plans Major Retreat From Mortgage Business It Long Dominated [Bloomberg]


It's morning again in America. CC BY-SA 2.5], via Wikimedia Commons

Layoffs Watch ’22: JPMorgan Chase, Wells Fargo

If you can do something other than mortgages, great. If not…

Getty Images

Famously Public-Minded Bank Doing All It Can To Help Out

Which, in Wells Fargo’s case, is not much, so don’t ask.


Elizabeth Warren Would Like Wells Fargo’s Latest Setback To Be Its Last

Well, it’s second-to-late. And if not that, let it be Jay Powell’s last.

Getty Images

Wells Fargo Trying To Look Like More Successful, Less Scandal-Ridden Bank

Charles Scharf used to work for Jamie Dimon, so he has a keen eye for the differences between their two firms.

Wells Fargo Bless this Mess

Layoffs Watch ’20: Wells Fargo (And, In ’21, Everyone Else)

The world’s fattest bank (in more ways than one) is preparing a crash diet.

Image adapted from Flickr User Aranami.

Stagecoach Still The Most Impressive Piece Of Technology Wells Fargo Has

In possibly related news, it just set half of its quarterly earnings on fire.

Image adapted from Flickr User Aranami.

Wells Fargo Calls Time Out On Its Rooney Rule

After imposing a few more modest hurdles for its employees the clear in cheating, the diversity interviewing policy shall return.