Sign of a slowdown? Wells Fargo cutting 600 mortgage jobs nationwide

The bank is "reducing to better align with current volumes"

National /
Aug.August 24, 2018 05:00 PM

Wells Fargo CEO Timothy Sloan and a single-family home

Wells Fargo said it would lay off more than 600 employees in its home mortgage business across. The reason: Fewer people are buying homes.

The cuts will affect workers nationwide, including states like California, Florida, North Carolina, and Colorado, according to Bloomberg. The Orlando Sentinel reported that 137 of those employees work in the central Florida city.

In a statement, the bank said: “After carefully evaluating market conditions and consumer needs, we are reducing to better align with current volumes.”

Wells Fargo is also seeing the end of a refinancing boom, as mortgage interest rates rise, according to Bloomberg. Mortgage fees the bank earned dropped to the lowest in more than five years in the second quarter.

The news comes shortly after the National Association of Realtors reported that existing home sales dropped by 0.7 percent in July compared to the same period in 2017. Combined with a decline in June, sales are now 1.5 percent lower than they were a year ago, and have fallen for five straight months on a year over year basis.

One of the reasons for the slowdown could be attributed to steadily rising home prices and may eventually lead to a leveling-off in pricing, experts have said.

In the Northeast, home sales have dipped by 8.3 percent, the most of any region in the country. Prices in the Northeast were also up 6.8 percent over the same time last year. The median house now costs $308,700 there.

Wells’ mortgage business staff cuts come amid a slight overall rise in the number of housing start foreclosures last month across the country. In some markets, those number jumped, like Miami — up 29 percent — and Los Angeles, which was up 20 percent.

Nonbank home mortgage lenders, which the federal government does not regulate as heavily as traditional lenders, are becoming more popular. They accounted for nearly half of all mortgages in the U.S. in 2016, up from 30 percent in 2012, but are considered more risky because of their regulatory status.  [Bloomberg] – Dennis Lynch 


Related Articles

arrow_forward_ios
Miami skyline
South Florida home sales keep falling as price growth slows
South Florida home sales keep falling as price growth slows
(Illustration by The Real Deal with Getty)
“It’s not dead, it’s just different.” South Florida resi slowdown persists
“It’s not dead, it’s just different.” South Florida resi slowdown persists
Danielle Hale
Slowdown is “paradoxical:” Realtor.com’s chief economist on Miami housing market’s future
Slowdown is “paradoxical:” Realtor.com’s chief economist on Miami housing market’s future
From left: Ansorg Development's Karl-Ulrich Ansorg, Tulip Group's Kobi Elbaz, Ofir Gabriel, and Amit Kort in front of 234-264 Northeast 34th Street in Miami (Getty, Google Maps, YouTube/Tulip Group Thailand, usbotschaftberlin, Public domain - via Wikimedia Commons)
Inside look at planned Edgewater mixed-use condo tower
Inside look at planned Edgewater mixed-use condo tower
Florida Atlantic University processor Ken Johnson and Brown Harris Stevens' Sheila Rojas (Florida Atlantic University, Brown Harris Stevens, Getty)
Record rent hikes had slowed. Ian may change that
Record rent hikes had slowed. Ian may change that
Ron DeSantis and Peter Thiel (Illustration by The Real Deal with Getty)
Peter Thiel on Florida real estate: “becoming like California”
Peter Thiel on Florida real estate: “becoming like California”
Affiliated Development co-founder Nick Rojo along with 9445 Fontainebleau Boulevard in Miami (left) and the Bohemian apartment project in Lake Worth Beach (right) (Getty Images, Affiliated Development, Google Maps, MSA Architects)
“Slamming on the brakes”: South Florida’s record rent hikes slow
“Slamming on the brakes”: South Florida’s record rent hikes slow
Clockwise from top left: One Sotheby’s Jorge Uribe, Compass' Ida Schwartz, Fortune International Group's Edgardo Defortuna and Royal Palm Companies' Dan Kodsi (Illustration by Kevin Rebong for The Real Deal)
Slowdown hits South Florida’s hot resi market: Here’s what that means
Slowdown hits South Florida’s hot resi market: Here’s what that means
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...