Wells Fargo, the third-biggest mortgage lender in the country, will lay off 125 employees in its home lending division in Iowa by the end of August.
The bank will cut 11 jobs in July and 114 in August, according to Worker Adjustment and Retraining Notification (WARN) notices submitted to the Iowa Workforce Development.
The bank eliminated 72 mortgage jobs in Iowa across earlier layoffs.
“The home lending displacements are the natural result of cyclical changes in the broader home lending environment, as has been acknowledged by most mortgage providers across the industry in recent weeks,” Lylah Holmes, a spokesperson at Wells Fargo, told HousingWire.
The bank will provide severance and career counseling.
“Of those impacted in home lending so far this year, about 35% are moving into other roles within Wells Fargo,” Holmes said.
But the bank declined to say how many employees have been laid off in the home lending business overall this year.
Wells Fargo’s revenues in the home lending business totaled $1.5 billion in the first quarter this year, a 19% drop compared to the previous quarter and 33% lower than the same period in 2021.
“The mortgage origination market experienced one of its largest quarterly declines that I can remember, and it will take time for the industry to reduce excess capacity,” Charlie Scharf, Wells Fargo’s CEO, said analysts in April.
According to bank executives, originations and margins were under pressure in the second quarter – the bank’s Q2 2022 earnings are expected to be released on July 15.
Wells Fargo executives in early June said the bank was considering pulling back on its mortgage business, where, beyond the challenges related to a decline in originations, it has also struggled with scandals related to minority lending.