From being ordered to pay more than $2 billion for allegedly lying about the quality of subprime and Alt-A mortgages, to publicly admitting the incorrect denials of customer mortgage modifications that could have potentially prevented 400 foreclosures, it’s safe to say Wells Fargo is having another tough year.
The big bank announced this week it is laying off 638 mortgage employees in California, Colorado, Florida and North Carolina, according to an article written by Hanna Levitt for Bloomberg.
The bank’s latest earnings report indicated it continues to struggle following its fake accounts scandal. Not only did the bank report a lower net income, its latest earnings report shows that although originations are increasing, it is still struggling with mortgage banking revenue.
Affected employees were informed of the upcoming layoffs on Thursday. Employees will be eligible to receive pay and benefits through Oct. 21, the company said.
However, employees unable to find another position within the company may be eligible to participate in the Wells Fargo salary continuation plan for separation benefits based upon the number of years of service with the bank, according to Wells Fargo's SVP of Consumer Lending Operations Tom Goyda.
“Those [employees] were primarily retail fulfillment and servicing team members, and the reductions reflect ongoing declines in application volume and in the number of customers in default who need assistance,” Goyda told HousingWire in a statement.
Among the layoffs, approximately 55 employees from a home mortgage call center located in Colorado Springs, Colorado will be laid off.
The call center primarily focused on staffing processors, underwriters and “others” to aid borrowers looking to access their home equity, according to an article by Wayne Heilman for The Gazette.
From the article:
In an email statement from Denver-based spokeswoman Nicole Schwab, the San Francisco-based financial giant attributed the cutbacks to “continuing market changes” that have resulted in “several team member staff reductions in various markets since the beginning of 2018. We continue to adjust capacity within our lines of business to meet customer needs — and to ensure we’re operating as efficiently and effectively as possible.”
These layoffs are not the first round of layoffs for the big bank's mortgage business this year. Earlier this year, Wells Fargo announced it was laying off 100 employees at a Fort Mill, North Carolina-based mortgage office, and 63 more mortgage employees at a Frederick, Maryland-based office.
Not only is the company shrinking the number of its mortgage employees, but it is following through on its promises to reduce its retail bank branches by about 5,000 by the end of 2020 through consolidations and divestitures.
As previously reported, Flagstar Bancorp announced the acquisition of 52 Wells Fargo company branches in June. Flagstar extended job offers to 490 team members to branches located in Indiana, Michigan, Ohio and Wisconsin.