Wells Cuts and Shores Up B&C Unit

In response to a meltdown in the B&C market, Wells Fargo Home Mortgage on Friday tightened its subprime underwriting guidelines and began cutting mortgage jobs. As MortgageWire went to press on Tuesday details about the changes were sketchy, but according to a statement issued by the firm, subprime loan types affected the most include low-documentation, high loan-to-value and high debt-to-income notes. No figures were available on how many jobs were cut but the statement says, "Most affected team members also receive a 60-day notice, and are offered separation benefits that include insurance and salary continuation based on years of service with the company." Last week the bank-owned WFHM also radically changed how it reports its subprime correspondent production by excluding "co-issuance" volume. This reporting change -- which affects survey figures compiled by National Mortgage News and others -- reduced WFHM's third-quarter production volume by $15 billion, or a whopping 65%. WFHM now ranks fifth among subprime producers, compared to first (prior to the change).