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Mega lenders fall on Wall Street as refinancing activity subsides

Big banks decline on the HW 30 index

Big banks felt the heat Thursday, as the stocks of mega lenders declined on the HW 30, HousingWire's exclusive index of mortgage finance and housing-related stocks.

The stocks fell on news that lenders continued laying off staff to deal with declining demand as refinancing activity cooled.

Bank of America (BAC) — which will be removed from the Dow Jones Industrial Average after the close of trading on Sept. 20 — fell 1.16% on the HW 30 index on Thursday. Over the past month, Bank of America grew only 0.49%. The bank opened Thursday at $14.65 per share and closed the day at $14.48.

JPMorgan Chase's stock (JPM) dropped 1.92% on the index the same day. The bank’s stock crossed below their last reported book value — defined as common shareholder equity per share — on the New York Stock Exchange during Thursday trading. Over the past month, the bank fell 3.42% on the HW 30 index. JPMorgan Chase opened Thursday at $53.43 per share and closed at $52.24.

Wells Fargo (WFC) finished the day down 0.56% on the index, opening at $42.52 per share and closing at $42.26. The past month has left Wells Fargo down 2.18%.

This comes as no surprise to those who have been following the impact that rising mortgage rates are having on mortgage lenders.

Back in June, JPMorgan filed a notice with the state of New York, disclosing a planned layoff of 412 call center employees at a mortgage default operations division. At the end of August, Wells Fargo announced that job cuts in its mortgage division reached 2,300.

Only a few days later, Bank of America revealed that it is falling in line with other lenders by cutting more than 1,000 jobs in home loan fulfillment and consumer banking services. BofA blamed the layoffs on falling refi volumes resulting from higher mortgage rates.

Other banks not listed on the HW 30 index have also reported layoffs. 

Just Thursday, Citigroup (C) announced plans to lay off a projected 2,200 workers within its mortgage business by early next year, as rising mortgage rates hinder the mortgage lending and refinance business.

Wednesday’s mortgage applications report was only further proof that mortgage lenders are taking a hit from rising rates.

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