VOL. 128 | NO. 165 | Friday, August 23, 2013
Wells Fargo to Lay Off 2,300 Mortgage Workers
CHRISTINA REXRODE | AP Business Writer
NEW YORK (AP) – Wells Fargo is laying off workers from its mortgage unit, the latest sign that the mortgage refinancing boom has cooled.
The San Francisco-based bank said it sent 60-day notices to about 2,300 mortgage employees on Wednesday. The layoffs will be at "locations across the country," the bank said in a statement, and a spokesman declined to give details.
The bank said it had to lay off workers because mortgage refinancing demand had dropped compared to 2012 and early 2013. Wells Fargo is the biggest mortgage lender in the U.S., and its results have been greased in recent quarters by waves of homeowners refinancing their loans to take advantage of low interest rates.
Rates have been rising since the spring, though, as investors bet that the Federal Reserve will rein in some of its programs meant to stimulate the economy, starting perhaps as early as next month. The average rate on a 30-year, fixed-rate mortgage is about 4.6 percent, still a historic low but up from 3.6 percent three months ago.
Last month, Wells Fargo reported that it received $146 billion in applications for first mortgages from April to June, with refinancings making up 54 percent. That was down from a year ago, when the bank received $208 billion in applications with refinancings making up 69 percent.
The layoffs make up less than 1 percent of Wells Fargo's total workforce. But they're notable because Wells, unlike other mega-banks, has been adding jobs overall rather than subtracting them.
Spokesman Tom Goyda said the bank would try to find "other opportunities" for laid-off workers within Wells Fargo.
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