Wells Fargo, the nation's largest home lender among US banks, has begun laying off mortgage staff after reporting a sharp decline in home lending revenues in the first quarter of 2022, Insider has learned.
Word of the jobs cuts were first seen on job-sharing website The Layoff, where multiple posters complained of layoffs within the bank's mortgage operations teams, which include loan processors and underwriters.
Wells Fargo on Friday confirmed that there were layoffs within its home lending operation, but declined to specify the scope of cuts.
"We are carrying out displacements in a transparent and thoughtful manner and providing assistance, such as severance and career counseling. Additionally, we are committed to retaining as many employees as possible and will do everything we can to help them identify other opportunities within Wells Fargo," a Wells Fargo spokesperson said in a statement provided to Insider.
Postings on The Layoff, however, suggest Wells Fargo's layoffs hit mortgage teams in at least five US cities, including the Phoenix, Des Moines, and San Antonio markets, as well as in Portland, Oregon, and Raleigh, North Carolina.
"Was told this afternoon that select Agency processors, underwriters, and managers were laid off," one anonymous poster wrote on Thursday.
"Processing, underwriting, and credit administration teams were notified 'their position would be eliminated because of the changing mortgage market.' They were given a 2 week notice," another poster said.
Wells Fargo, in confirming the cuts, blamed the sharp decline in home mortgage originations as the Fed raises interest rates to combat inflation. In recent weeks, average rates for 30-year fixed mortgages have reached those last seen in 2010, above 5%.
"The home lending displacements this week are the result of cyclical changes in the broader home lending environment. The employees affected by these changes have each been an essential part of our success," the Wells Fargo statement to Insider said.
In April, Wells Fargo reported that revenues within home lending had fallen to $1.5 billion in the first quarter of 2022, down 33% on the same period in 2021 and 19% on the fourth quarter of last year.
"We believe the mortgage market experienced its largest quarterly decline since 2003, primarily due to lower refinance activity in response to higher mortgage rates," Wells Fargo CFO, Mike Santomassimo, told analysts on the bank's quarterly earnings call this April.
"We've started to reduce expenses in response to the decline in volume and expect expenses will continue to decline throughout the year as excess capacity is removed and aligned to lower business activity," Santomassimo also told analysts.
Wells Fargo hasn't been the only mortgage company affected by rising rates and pressure on home lending volumes.
On Tuesday, Housing Wire reported that tech startup Blend, which runs the technology used by major mortgage lenders including Wells Fargo, had laid off 10% of its staff. Also on Tuesday, mortgage startup Better, which has been beset by controversy since it began cutting staff last December, also announced it was pursuing another round of mass layoffs, TechCrunch reported. The job cuts came after Better laid off thousands of employees in March.
