Wells Fargo & Co. (WFC), the largest U.S. home lender, cut 1,900 employees from its mortgage unit, or less than 1 percent of the workforce, as fewer would-be borrowers submit applications for loans.
Wells Fargo told U.S. employees of the cuts on March 23, giving them 60 days notice, Jason Menke, a spokesman for the San Francisco-based bank, said today. Most employees were in interim roles processing mortgage applications, and a “handful” were in servicing operations. Some employees may be transferred to other departments, he said.
“The mortgage business is incredibly cyclical and we have to scale our operations according to customer demand,” Menke said in a phone interview. Employees “were brought in for short-term assignments when they were hired. They were told that at some point these roles would end.”
Wells Fargo mortgage originations slipped to $386 billion last year from $420 billion in 2009, according to the bank’s fourth-quarter earnings statement. Pending mortgage applications declined to $73 billion at the end of 2010 from $101 billion in the third quarter, the bank said. Wells Fargo had 272,200 employees at the end of December, according to a filing.
The average rate on a typical U.S. fixed-rate 30-year mortgage increased to 4.89 percent on April 6 from 4.20 percent in November, according to bankrate.com, a North Palm Beach, Florida-based data firm.