Wells Won't Buy from 86 Correspondent Lenders

The correspondent lending arm of Wells Fargo Bank this week began publishing a list of third-party originators that it will no longer buy loans from in the secondary market -- as a way to address what it calls “risks” in loan origination.

According to a March 19 memo from Wells Fargo Funding, roughly 86 firms are on the exclusionary list, including some failed lenders and troubled depositories insured by the Federal Deposit Insurance Corp.

The memo was provided to NMN by a confidential source.

If a lender appears on the exclusionary list, Wells will not buy any mortgages from the firm effective March 26.

The bank notes that it will update the list regularly stressing that “exceptions cannot be made.”

As NMN went to press, a spokeswoman for the bank's mortgage unit could not be reached for comment.

Over the past few months rumors have circulated that Wells might exit or severely cut back its presence in the correspondent channel where it has a 34% market share, according to just released figures compiled by National Mortgage News and the Quarterly Data Report.

In the fourth quarter, for instance, Wells purchased almost $55 billion of mortgages from third-party correspondents, which means the channel accounted for 46% of its total loan volume.

Wells also runs a warehouse lending division, but does not publish those figures.

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