Wells Fargo shrinking its mortgage business

[nidena]

Wells Fargo, once the No. 1 player in mortgages, is stepping back from the housing market

KEY POINTS

• Instead of its previous goal of reaching as many Americans as possible, the company will now focus on home loans for existing bank and wealth management customers and borrowers in minority communities, CNBC has learned.
• As part of its retrenchment, Wells Fargo is also shuttering its correspondent business that buys loans made by third-party lenders and "significantly" shrinking its mortgage-servicing portfolio through asset sales.
• Altogether, the shift will result in a fresh round of layoffs for the bank's mortgage operations, executives acknowledged, but they declined to quantify exactly how many jobs will be lost.
  

They were my first bank, as a kid, and my first mortgage, as an adult.  I wouldn't touch them now with a 10-foot pole...been like that for some time now.

[jerseygirl]

I’m amazed that WF is still in business
Customers must be oblivious. Guess WF counts on these stupid customers and realizes it can keep doing shady actions
Fines are cost of business

[swamp]

I have discussed my experiences with WF as a bank attorney on previous threads.    I will never do business with them. 

[Cookies Galore]

WF bought our mortgage after our refi in 2020, guess we're getting sold again this year! We've had no issues with them.

[busymom]

I've never had Wells Fargo for a mortgage by choice.  Whenever DH & I got a mortgage, or refinanced, it'd get sold to WF.  We refinanced one last time, and FINALLY the newest holder of our mortgage is hanging onto it.  I promise NOT to miss WF.  

[Tiny]

I've got a Wells Fargo mortgage. I don't have any complaints about WF to date. But, then I had all of my paperwork ready to go (so 24 hour or less turnaround when they asked me for documents) and could easily afford the mortgage. And I don't have any trouble paying the mortgage. Their website is OK. Wells Fargo is less annoying than Bank of America for me... WF pays the property tax and insurance on time, Bank of America rarely did so.

Wells Fargo always seems to be trying to sell me something though - and their offers and product marketing always feels a little "predatory" to me... like the late night advertisements for for profit colleges that can get you into your dream job ASAP, or the auto insurance companies that can get you the cheapest insurance and quote prices by the week (or month), or those companies that will rent furniture, TVs, technology, appliances to you because it's so convenient and so inexpensive!

I had noticed the sales pitches fell off - but I thought that was because it was the end of the year (and the Holidays).


I'm guessing all the big lenders are changing tactics as the housing market changes and demand for re-finances have dried up and maybe even demand for new mortgages.
The Big Lenders more or less stopped offering HELOCs in early 2022.

[nidena]

Jan 11, 2023 11:24:10 GMT -5 busymom said:

I've never had Wells Fargo for a mortgage by choice.  Whenever DH & I got a mortgage, or refinanced, it'd get sold to WF.  We refinanced one last time, and FINALLY the newest holder of our mortgage is hanging onto it.  I promise NOT to miss WF.  

Mine always got bought by Freedom Mortgage.  They suck, too.

[minnesotapaintlady]

Wells Fargo bought my entire bank back in the 90's so I was with them because of that for quite a while and had a couple mortgages with them.  Jumped ship for a local credit union about 20 years ago and they never sell their mortgages...or at least never sold any of mine.  I never had any problems with WF, but I was sick of jumping through hoops to avoid fees and my CU offered high yield checking and better rates on the mortgages.  I do still have a savings account with them because it's joint with my stepdad but that's about my only dealings with them anymore.

[Cookies Galore]

Jan 11, 2023 20:16:22 GMT -5 Tiny said:

I've got a Wells Fargo mortgage. I don't have any complaints about WF to date. But, then I had all of my paperwork ready to go (so 24 hour or less turnaround when they asked me for documents) and could easily afford the mortgage. And I don't have any trouble paying the mortgage. Their website is OK. Wells Fargo is less annoying than Bank of America for me... WF pays the property tax and insurance on time, Bank of America rarely did so.

Wells Fargo always seems to be trying to sell me something though - and their offers and product marketing always feels a little "predatory" to me... like the late night advertisements for for profit colleges that can get you into your dream job ASAP, or the auto insurance companies that can get you the cheapest insurance and quote prices by the week (or month), or those companies that will rent furniture, TVs, technology, appliances to you because it's so convenient and so inexpensive!

I had noticed the sales pitches fell off - but I thought that was because it was the end of the year (and the Holidays).


I'm guessing all the big lenders are changing tactics as the housing market changes and demand for re-finances have dried up and maybe even demand for new mortgages.
The Big Lenders more or less stopped offering HELOCs in early 2022.

This has been my experience with them. Website is perfectly okay, better than SunTrust/Truist, which owned our mortgage previously. Always pays property taxes early in the discount period. No issues with escrow. Lots of ads for their services. I think I'll pass on refinancing while my rate is at 3%, lol.

[Tiny]

OK, when you all say your mortgage was sold does that mean it changed who you handled your mortgage payment and escrow??

I know my very first mortgage with the Local S&L was not sold to Fannie Mae. The S&L held it. I'm not sure if they do that with all of the mortgages they write or not  (I had a small mortgage right from the get go). The S&L only does mortgages on local properties (I think it's an area of 4 or 5 suburbs) and they've been doing that since the 1890's.   Oddly, the S&L came thru the Housing Crash without much damage from foreclosures.  Go figure. 



I know Bank of America of quickly sold my mortgage to Fannie Mae but Bank of America continued to handle the mortgage payment/escrow.

I got a notice about the sale of my Chase mortgage (to Fannie Mae) within the first year as well... but again I continued to pay Chase every month. And have for 10 years.

I honestly can't remember if I saw that Wells Fargo had sold my mortgage - I assume they did. but I continue to pay Wells Fargo.


My experience is that there is no change or complications when the Big Bank I got my mortgage from - sells that mortgage.

Is this just because I've used Big Banks?

[TheOtherMe]

My bank sold my rural development loan immediately after I made one payment to them.  The rates got enough lower that I did a refi.  That time the bank (it's a regional bank) serviced it for several years.  Then it was decided they would no longer service any of their mortgages.

My mortgage is now serviced by Loan Care and the website for me is a disaster.  It only works in Chrome.  I have to go through several pages of why I should refi (seriously at these rates) and then I get to my mortgage.  I only go there once a month and then I have to remember how I get to the monthly interest, principal and escrow I paid.  It shouldn't be that hard.

Every time I try to pay an extra amount towards escrow, they promptly send it back.  I see the property tax and insurance bill and know there will be a shortage but I have not figured out a way to pay it ahead.

It was easy to download my Form 1098 this morning--even though I don't itemize.

[Deleted]

Wells Fargo was the first mortgage I had where I didn't have to have an escrow account. I was 50 years old. For that I'll be forever grateful. They also offered a cost-free re-financing out of the blue when interest rates went down, maybe 5 years later. It was painless and it really was cost-free.

The stuff I read about them a few years ago about how they pressured their employees to open other accounts besides what the customers wanted (credit cards, checking, etc.) was pretty sleazy ad has soured my opinion of them.

I'm kind of curious about why they're continuing mortgages in low-income areas.  Noble social goals?  Or hoping to find people in those areas that are lower risk than average where they'll have a lower default rate/higher profit?  

Jan 12, 2023 15:05:32 GMT -5 Tiny said:

I know my very first mortgage with the Local S and L was not sold to Fannie Mae. The S and L held it. I'm not sure if they do that with all of the mortgages they write or not  (I had a small mortgage right from the get go). The S and L only does mortgages on local properties (I think it's an area of 4 or 5 suburbs) and they've been doing that since the 1890's. Oddly, the S and L came thru the Housing Crash without much damage from foreclosures. Go figure.

That's because they actually UNDERWROTE their mortgages knowing that if the borrower defaulted they'd be left with the loss- not some nameless, faceless investor who bought it as part of a tranche of other mortgages.

[busymom]

Jan 12, 2023 15:05:32 GMT -5 Tiny said:

OK, when you all say your mortgage was sold does that mean it changed who you handled your mortgage payment and escrow??

I know my very first mortgage with the Local S&L was not sold to Fannie Mae. The S&L held it. I'm not sure if they do that with all of the mortgages they write or not  (I had a small mortgage right from the get go). The S&L only does mortgages on local properties (I think it's an area of 4 or 5 suburbs) and they've been doing that since the 1890's.   Oddly, the S&L came thru the Housing Crash without much damage from foreclosures.  Go figure. 



I know Bank of America of quickly sold my mortgage to Fannie Mae but Bank of America continued to handle the mortgage payment/escrow.

I got a notice about the sale of my Chase mortgage (to Fannie Mae) within the first year as well... but again I continued to pay Chase every month. And have for 10 years.

I honestly can't remember if I saw that Wells Fargo had sold my mortgage - I assume they did. but I continue to pay Wells Fargo.


My experience is that there is no change or complications when the Big Bank I got my mortgage from - sells that mortgage.

Is this just because I've used Big Banks?

    Yes, banks sometimes group mortgages & "sell" them to other banks.  Wells Fargo has been a big player in that game for years.  They are the only company we've ever had that had made mistakes on our account, and it was a pain to fix.  So no, they would NOT be my first choice in a mortgage company.  

[Deleted]

Jan 12, 2023 21:28:42 GMT -5 busymom said:

Yes, banks sometimes group mortgages & "sell" them to other banks. Wells Fargo has been a big player in that game for years. They are the only company we've ever had that had made mistakes on our account, and it was a pain to fix. So no, they would NOT be my first choice in a mortgage company.

Yeah, not necessarily a bad practice- it frees up capital so they can make more loans. It just got crazy in the financial crisis when they sold "tranches" (layers) of packaged loans to investors, and then other firms created derivatives, which had no mortgages at all but were basically a gamble on how the prices of the mortgages would change.

Even now it's harder and more expensive to get a "non-conforming loan"- one that's above the levels that Fannie Mae and Freddie Mac will buy (currently $647,000 in most areas). They also don't want to mess with anything under $100K.

I remember my first mortgage well- it was in NNJ, very HCOL area, 1979 and a friend and I were buying a 2-family. We had decent incomes but were having a hard time scraping up a 5% down payment and the amount we could borrow was constrained by that particular program (MGIC), which would lend no more than $75,000. I thought it was the end of the world when I found that we'd have to pay at the closing for the oil in the two recently-filled 500-gallon tanks. A family member loaned us $2,000 and write up a second mortgage on the home, which was fine with me.

Now I may be on my last mortgage. Balance is $55,000 at 3%. I'd love to pay it off but my advisor has talked me out of it, pointing out I could get a 4% CD for that amount. My next move (not soon, I hope) will be some sort of retirement community and I'll just sell the house and buy in.

[Cookies Galore]

Jan 12, 2023 15:05:32 GMT -5 Tiny said:

OK, when you all say your mortgage was sold does that mean it changed who you handled your mortgage payment and escrow??

I know my very first mortgage with the Local S&L was not sold to Fannie Mae. The S&L held it. I'm not sure if they do that with all of the mortgages they write or not  (I had a small mortgage right from the get go). The S&L only does mortgages on local properties (I think it's an area of 4 or 5 suburbs) and they've been doing that since the 1890's.   Oddly, the S&L came thru the Housing Crash without much damage from foreclosures.  Go figure. 



I know Bank of America of quickly sold my mortgage to Fannie Mae but Bank of America continued to handle the mortgage payment/escrow.

I got a notice about the sale of my Chase mortgage (to Fannie Mae) within the first year as well... but again I continued to pay Chase every month. And have for 10 years.

I honestly can't remember if I saw that Wells Fargo had sold my mortgage - I assume they did. but I continue to pay Wells Fargo.


My experience is that there is no change or complications when the Big Bank I got my mortgage from - sells that mortgage.

Is this just because I've used Big Banks?

Both our initial purchase and then our refinance were with the same regional mortgage lender because we had such a great buying experience with our mortgage guy and his team. But yes, after we settled we were told our mortgage would be sold and we would probably only make one payment to them before it went elsewhere. I've only ever bought one house and did one refi, so I have no experience with just going to a big bank first; having the mortgage sold to a bigger bank is my only experience.

[Bonny]

Given how many mortgages we've had over the last nearly 35 years it is interesting that we've never had a loan originated or serviced by WF nor have we ever had a bank acct. But we do own stock which we inherited over 20 years ago from DH's grandmother's Trust. I think the stock was originally purchased in the 70s but am not sure. DH took a step up value in 2001 when his dad died and he physically inherited the stock.

We've kept it over the years even though the stock price has bounced all over the place the dividends have been good.

Last time I checked, something like 95% of US mortgages were owned by FNMA or Freddie Mac. Servicing is big bucks. Even if the loan goes into foreclosure the service contracts provide for the servicing companies to continue to collect fees.

WF might not need loan officiers, process servers or other support personelle for loan originations but if we go into a recession they will need to have loss mitigation personelle for loan modifications and foreclosure servicing. We've seen this before!

I'm skeptical about the minority lending goal. I wonder if there's s threat of redlining litigation in the wings.

[Deleted]

Jan 16, 2023 12:11:22 GMT -5 Bonny said:

I'm skeptical about the minority lending goal. I wonder if there's s threat of redlining litigation in the wings.

Call me a cynic but it's either that, a box they can tick to show they have noble "Environmental Social and Governance (ESG)" objectives, or there's a government subsidy or guarantee involved.

[Tiny]

Jan 16, 2023 12:11:22 GMT -5 Bonny said:

Given how many mortgages we've had over the last nearly 35 years it is interesting that we've never had a loan originated or serviced by WF nor have we ever had a bank acct.

I'm not surprised. Wells Fargo seems to be more "regional". My Wells Fargo loan is for a house in Florida. WF has a bigger presence in Florida than it does in my State. There are 3 WF locations (all of them 40mins to 1 hr drive from my home in 3 different directions from my home).

I'm skeptical about the minority lending goal. I wonder if there's s threat of redlining litigation in the wings.

I'm skeptical of that minority lending goal, too.

In the Banking world what does "minority" mean in this context - the size of the loan (as in smaller mortgages on houses with smaller values)?

[Deleted]

Jan 16, 2023 13:54:36 GMT -5 Tiny said:

In the Banking world what does "minority" mean in this context - the size of the loan (as in smaller mortgages on houses with smaller values)?

I’m guessing it’s areas with a high % of minorities. It’s pretty standard that no one wants to write a mortgage for less than $100,000- not enough profit. (That in itself, though, does make it harder for people with lower earnings who are trying to buy or sell cheaper houses.)

[Bonny]

Jan 16, 2023 13:54:36 GMT -5 Tiny said:

Jan 16, 2023 12:11:22 GMT -5 Bonny said:

Given how many mortgages we've had over the last nearly 35 years it is interesting that we've never had a loan originated or serviced by WF nor have we ever had a bank acct.

I'm not surprised. Wells Fargo seems to be more "regional". My Wells Fargo loan is for a house in Florida. WF has a bigger presence in Florida than it does in my State. There are 3 WF locations (all of them 40mins to 1 hr drive from my home in 3 different directions from my home).

I'm skeptical about the minority lending goal. I wonder if there's s threat of redlining litigation in the wings.

I'm skeptical of that minority lending goal, too.

In the Banking world what does "minority" mean in this context - the size of the loan (as in smaller mortgages on houses with smaller values)?

Lol we've had two houses and probably six mortgages on those two homes 15 miles from WF's headquarters in San Francisco. We also have a WF branch in the Safeway 1mi from my house where we do a lot of our grocery shopping. It is true that we've had a least one BofA loan on our current house. BofA also used to based in SF until they bought Nation's Bank and relocated to Raliegh NC. We still have a bricks and mortar branch in the same shopping center. Location was probably a factor 30+ years ago.

As to "minority lending" my guess is it refers to census tract information and how people self identify as minority.

[Tiny]

Jan 16, 2023 14:50:58 GMT -5 @athena53 said:

Jan 16, 2023 13:54:36 GMT -5 Tiny said:

In the Banking world what does "minority" mean in this context - the size of the loan (as in smaller mortgages on houses with smaller values)?

I’m guessing it’s areas with a high % of minorities. It’s pretty standard that no one wants to write a mortgage for less than $100,000- not enough profit. (That in itself, though, does make it harder for people with lower earnings who are trying to buy or sell cheaper houses.)

I guess I was pondering if Wells Fargo was doing a "play on words"  - in the sense that  some of the areas they serve  have a high % of those in the minority who are NOT middle/low income.    Which might result in WF taking on less risk and not actually helping the people who could use a big lender who was willing to lend to them.  WF generate "consumer good will" without actually doing anything to deserve it.  

[Deleted]

Jan 16, 2023 18:43:15 GMT -5 Tiny said:

I guess I was pondering if Wells Fargo was doing a "play on words"  - in the sense that  some of the areas they serve  have a high % of those in the minority who are NOT middle/low income.    Which might result in WF taking on less risk and not actually helping the people who could use a big lender who was willing to lend to them.  WF generate "consumer good will" without actually doing anything to deserve it.  

Yeah, I live in a neighborhood like that- 42 lots around a lake, houses are architect's originals, maybe 40% minority owners. The Zip Code in which we're located has lower incomes, more single-parent families, etc. so lending in my subdivision would make WF look mighty nice.