Wells Fargo cutting 1,800 jobs in mortgage business

NEW YORK Thu Sep 19, 2013 11:16am EDT

A Wells Fargo sign is seen outside a banking branch in New York July 13, 2012. REUTERS/Shannon Stapleton

A Wells Fargo sign is seen outside a banking branch in New York July 13, 2012.

Credit: Reuters/Shannon Stapleton

NEW YORK (Reuters) - Wells Fargo & Co (WFC.N), the largest U.S. mortgage lender, said on Thursday that it will cut 1,800 jobs in its home loan business due to lower demand for refinancing amid higher interest rates.

The fourth-largest U.S. bank provided a 60-day notice on Wednesday to employees whose jobs were to be eliminated, the bank said in a statement.

Chief Financial Officer Tim Sloan told investors at a conference on September 9 that the San Francisco bank had laid off 3,000 employees in its mortgage business so far in the third quarter. Sloan also said Wells Fargo expected to make $80 billion in home loans in the third quarter, nearly 30 percent below its second-quarter figure.

As mortgage revenue declines, the bank is looking to trim expenses in the unit, a process that usually takes one to two quarters, Sloan said.

News of the planned layoffs was first reported by Bloomberg News on Wednesday.

Wells Fargo made more than one of every five U.S. home loans in the second quarter, according to Inside Mortgage Finance, an industry publication.

Wells Fargo shares were down 0.7 percent at $43.02 on the New York Stock Exchange on Thursday morning.

(Reporting by Nadia Damouni; editing by Matthew Lewis)

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Comments (10)
AlkalineState wrote:
Good. Wells Fargo is a very inefficient bank.

Sep 19, 2013 11:24am EDT  --  Report as abuse
Harry079 wrote:
Early signs of bigger trouble at Wells Fargo?

Sep 19, 2013 12:02pm EDT  --  Report as abuse
Whaaaat?? I thought demand for mortgage would be way up? Realtors are sayin’ its a great time to sell your house. Low inventories, pending sales are way up. This news doesn’t make sense, unless we’re being lied to ;)

Sep 19, 2013 12:34pm EDT  --  Report as abuse
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