Wells Fargo lays off hundreds of employees in mortgage lending sector

Wells Fargo reportedly laid off hundreds of employees as part of its ongoing pullback from the mortgage lending business – including some high-performing bankers who had just been rewarded with a ritzy corporate retreat in Palm Desert, Calif.

The majority of mortgage bankers who received pink slips included some who were considered top producers, with more than $100 million in loan volumes last year, CNBC reported, citing sources with knowledge of the matter.

Some laid-off bankers were reportedly flown out last year for the company-sponsored sales conference in Palm Desert. Conferences are commonplace in the sales world as a method of recognizing strong performance and fostering company culture.

The layoffs largely impacted Wells Fargo employees who earned most of their income based on sales volume, sources told the outlet. That included mortgage bankers and home loan consultants.

Wells Fargo did not specify how many employees were laid off in the latest round of cuts. Bloomberg reported more than 500 employees in Wells Fargo’s mortgage business lost their jobs.

When reached for comment, a Wells Fargo representative confirmed that the bank had “made displacements across our home lending business in alignment with this strategy and in response to significant decreases in mortgage volume in the broader market environment.”

“We have communicated openly and honestly with impacted employees and provided opportunities for severance, career assistance, and other services to assist them,” the representative said.

The representative added that Wells Fargo is attempting to “retain as many employees as possible” and had “good success” playing workers into other roles throughout its business.

Wells Fargo declined further comment on the layoffs or the California retreat.

The layoffs were confirmed weeks after Wells Fargo signaled plans to cut back on its mortgage services. The move came as the San Francisco-based bank faces ongoing scrutiny from federal regulators and a sharp downturn in the US housing market.

In January, Wells Fargo said it would shift its mortgage business to focus on existing customers, as well as individuals and families in minority communities. The institution previously laid off hundreds of mortgage employees in December.

The retreat from the mortgage market was a major reversal for Wells Fargo, which once ranked as the largest mortgage lender in the country. As recently as 2019, Wells Fargo had a lending volume of a whopping $201.8 billion.

Wells Fargo is still constricted by a $1.95 trillion asset cap put in place by the Federal Reserve in 2018.

Last year, Wells Fargo agreed to pay a record $3.7 billion to settle charges levied by the Consumer Financial Protection Bureau.

The watchdog had accused Wells Fargo of “a rinse-repeat cycle of violating the law,” including shady mortgage practices that caused thousands of customer applications to modify their mortgages to be improperly rejected.