Wells Fargo handed 140 pink slips to employees in its Springfield, Illinois office in mid- January, according to a Worker Adjustment and Retraining Notification (WARN) filed with the state.
Personnel impacted by the layoffs were part of the bank's correspondent lending team and were a result of
The reduction, first reported by
Plans for a mortgage pullback have been in the works since last year, with a Bloomberg report in August noting that Wells Fargo was in the midst of shrinking its vast mortgage empire.
In announcing its exit from the correspondent channel, the depository noted that the measure will help to "reduce risk in the mortgage business by reducing its size and narrowing its focus." A company spokesperson declined to give a timetable for winding down its correspondent lending channel or reducing its servicing portfolio.
Analysts have said that the bank's decision to exit correspondent lending and reduce the size of its mortgage servicing portfolio will have
In the meantime, Wells Fargo is turning its attention to "serving bank customers, as well as individuals and families in minority communities."
One such initiative is broadening its Special Purpose Credit Program. The bank's SPCP, which initially included a $150 million investment to refinance loans for minority homeowners, will now include purchase loans. The bank is also in the process of hiring additional mortgage consultants in communities of color.
