Wells Fargo mortgage staff braces for layoffs

According to CNBC, mortgage origination volume has dropped again in recent weeks. As a consequence, there are fears that the bank will have to lay off more workers. 

The slowdown in housing construction negatively affects the business. One of the consequences is that some employees have been made redundant, as reported by CNBC, citing sources.

Wells Fargo reportedly had about 18,000 loans in the first few weeks of the fourth quarter — down 90% from the same period last year, following a housing boom during the pandemic.

The Fed has hiked the interest rate this year, which has led to higher mortgage rates. Inflation has risen, affecting potential homebuyer budgets. Consequently, the demand for housing in the U.S. has fallen.

Among the six largest U.S. banks, Wells Fargo is considered the leader in mortgage lending, with a market share of over 15%, as reported by relbanks.com. According to this, the bank relies on mortgage loans.

On Oct. 14, Wells Fargo Chief Financial Officer Mike Santomassimo said they expected the housing market to go through tough times in the near term. He also noted that the bank's revenues from mortgage banking services in the fourth quarter may continue to decline, as a decrease in the number of loans was traditionally seen in the fourth quarter.