Banking giant Wells Fargo (WFC) blames changing market conditions for its decision to cut a total of 125 jobs within two mortgage fulfillment units located in Irving, Texas.
The job reductions are expected to impact the region's mortgage retail fulfillment group and its West retail fulfillment unit. About 70 of the cuts were announced last week, while the remaining employees received notices in the past few months, a spokesperson for Wells Fargo said.
Wells Fargo confirmed the mortgage-related layoffs with the Texas Workforce Commission on the same week that it announced 925 job cuts nationwide.
The reductions arrive at a time when the lender is still dealing with the aftermath of falling refinance volumes and a shifting mortgage space.
Dallas area staff members were notified on Oct. 16, with the actual layoffs expected to begin in mid-December, TWC noted.
While Wells Fargo recently reported a 13% jump in third-quarter earnings, there was nothing the firm could do to hide the obvious: the mortgage side of the market is struggling a bit. Revenue from mortgage banking softened in the third quarter, with noninterest income falling to $1.6 billion, down from $2.8 billion a year ago.
This occurred as mortgage origination volume for home loans declined from $112 billion to $80 billion during the most recent quarter. However, this is not a new trend. The market has been dealing with layoffs and warnings of new layoffs for months now.
Not long ago, Bank of America Merrill Lynch analysts warned of falling loan applications and the impact of new lows in industry employment levels.
"We think there is a significant chance that new lows in industry employment levels will hit over the next year and the lack of staffing will create a new negative feedback loop that further tightens mortgage credit availability," the analysts said at the time.
Most of the recent industry job cuts have been blamed on rising interest rates and declining refi volumes.