For a long time, Wells Fargo was the most significant player in the mortgage business in the United States. But that is set to change in the future as the bank plans to scale down its mortgage business in the future.
According to Bloomberg, Wells Fargo executives are currently working on a retreat plan that signals a shift in priorities for the company. It is believed that the bank intends to start the readjustment by cutting ties with the outside firms, which were a big generator of its mortgage revenue in the past.
At one point, Wells Fargo was handling one-third of home loans in the U.S., but that number is expected to be significantly smaller once the new policy kicks in. Reportedly, the bank will be focused on dealing with people that it has existing relationships with and places with a strong presence. Wells Fargo had $205 billion in new home loans last year compared to its closest rival JPMorgan’s 163 billion.
“Wells Fargo is committed to supporting our customers and communities through our home-lending business,” said the company in a statement when reached by Bloomberg for comment. “Like others in the industry, we’re evaluating the size of our mortgage business to adapt to a dramatically smaller originations market. We’re also continuing to look across the company to prioritize and best position us to serve our customers broadly.”
After Bloomberg’s report, Wells Fargo stock dropped 1.13% at one point. It is currently trading at $45.70 per share, which is almost 10% down year-to-date.