Wells Reducing Correspondent?

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MORTGAGE EXPERT
7 · 30 · 12

Wells Fargo & Co.’s mortgage unit won’t confirm whether or not it is closing its non-financial institution correspondent lending next year, as a source with knowledge of the matter has indicated. But the company did say that people working in the unit are doing a “great job.”

A confidential source has told Mortgage Daily that the Des Moines, Iowa-based mortgage subsidiary is looking at closing its “correspondent with NDIs” mortgage lending channel.

The potential exit date is Jan. 1, 2013, though no final decision has been made, according to the source — who is an NDI correspondent client of Wells Fargo.

Wells Fargo Home Mortgage Vice President External Communications Vickee J. Adams declined to discuss the possibility such a move.

“I can’t comment on that,” Adams said in a telephone interview.

She noted that an exit from the business “is completely counter to anything that I’ve heard to date and it’s not something that I would … put any weight on to offer a response.”

Adams also declined to respond to a question about whether the NDI correspondent lending business will be kept open next year.

In a subsequent telephone call, she highlighted the company’s support for the people working at the unit.

“We have a great deal of faith in our correspondent team and our leaders, and they’re doing a great job,” Adams proclaimed. “And there’s every reason to believe that this is a business that we’re wholly supportive of.”

On July 12, Wells Fargo & Co. disclosed that it would discontinue funding loans originated, priced and sold by independent mortgage brokers through its wholesale channel.

The wholesale exit was announced simultaneously with a $175 million settlement with the U.S. Department of Justice, the state of Illinois and the city of Baltimore. The settlement also resolved an investigative complaint filed in 2010 by the Pennsylvania Human Relations Commission.

“The DOJ claims are based on a statistical survey of Wells Fargo Home Mortgage loans between 2004 and 2009, and the claims primarily relate to mortgages priced and sold to consumers by independent mortgage brokers,” a statement at the time said.

Wells indicated that 5 percent of its business is originated through the wholesale channel.

During 2011, 47 percent of its residential production was generated though “correspondent/wholesale” based on earnings data — putting the correspondent share at around 42 percent. But no details were available about how much of the correspondent business was from non-depository institutions.

Mortgage Expert

Mortgage Daily Staff

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