In these occasions, double down — in your expertise, in your data, on you. Be a part of us August 8-10 at Inman Join Las Vegas to lean into the shift and study from one of the best. Get your ticket now for one of the best value.

Wells Fargo continues to shed mortgage employees as a part of a plan to withdraw from correspondent lending and simplify the financial institution’s dwelling lending enterprise, with the most recent spherical of layoffs this week focusing on a whole bunch of mortgage bankers and residential mortgage consultants whose compensation is generally gross sales based mostly, CNBC reported citing nameless sources.

The layoffs have been introduced Tuesday “and ensnared some high producers, together with a number of bankers who surpassed $100 million in mortgage volumes final yr and who not too long ago attended an inner gross sales convention for top achievers,” CNBC reported.

Requested to touch upon the report, a Wells Fargo spokesperson declined to offer specifics however pointed to the corporate’s announcement in January that the financial institution will not purchase mortgages from correspondent lenders as a part of a technique to higher serve the financial institution’s clients and minority communities.

“We introduced in January strategic plans to create a extra centered dwelling lending enterprise,” Wells Fargo mentioned in an announcement offered to Inman. “These plans proceed the work the corporate has superior over the previous three years to simplify the enterprise.”

As a part of these efforts, Wells Fargo confirmed “displacements” throughout its dwelling lending enterprise “in alignment with this technique and in response to vital decreases in mortgage quantity within the broader market setting.”

In reporting fourth-quarter earnings, Wells Fargo mentioned it shed 10,000 workers throughout all divisions in 2022, ending the yr with 239,000 employees. That’s the identical quantity employed on the finish of the third quarter however represented a 4 p.c discount from a complete workforce of 249,000 on the finish of 2021.

At $8.4 billion, fourth-quarter personnel bills have been down simply $60 million from a yr in the past, or 1 p.c, as a lot of the financial savings Wells Fargo expects to appreciate down the street have been offset by $353 million in severance bills — primarily in dwelling lending, the corporate mentioned.

“Staff affected by these adjustments have every been an essential a part of our success,” Wells Fargo mentioned in an announcement offered to Inman. “We have now communicated brazenly and truthfully with impacted workers and offered alternatives for severance, profession help, and different companies to help them. Moreover, we intend to retain as many workers as potential and have had good success figuring out different alternatives and transferring them into different roles inside Wells Fargo.”

Wells Fargo mortgage originations, by channel

Supply: Inman evaluation of Wells Fargo regulatory filings

Correspondent lenders are usually smaller establishments that originate and fund their very own loans, then resell them to different lenders or buyers.

Throughout the ultimate three months of 2022, Wells Fargo trimmed its correspondent mortgage originations by 58 p.c from a yr in the past to $6.4 billion. However with mortgages originated by the corporate’s retail channel additionally down by 75 p.c, correspondent lenders accounted for 44 p.c of Wells Fargo’s fourth-quarter mortgage manufacturing.

Because it closes branches, Wells Fargo is serving extra clients on-line

Supply: Inman evaluation of Wells Fargo regulatory filings.

Whereas rising mortgage charges put a dent in lots of mortgage lenders’ originations final yr, Wells Fargo has additionally been closing retail branches that accounted for three-fourths of Wells Fargo’s 2021 mortgage mortgage originations.

Wells Fargo has closed practically 1,000 retail department workplaces within the final 4 years, with 4,598 workplaces open on the finish of 2022. That’s down 17 p.c from 5,518 on the finish of 2018.

However with extra clients doing their banking on-line, Wells Fargo’s depend of “digital energetic” clients has climbed by 15 p.c over the identical interval to 33.5 million.

Though Wells Fargo has additionally been closing retail branches in recent times, the financial institution mentioned in January that it plans to rent extra dwelling mortgage consultants to work in minority communities. Wells Fargo plans to broaden an current $150 million funding from the corporate’s Particular Goal Credit score Program (SPCP) to incorporate buy loans and make investments a further $100 million to advance racial fairness in homeownership by investing in strategic partnerships with nonprofit organizations and community-focused engagements.

Noninterest revenue from Wells Fargo mortgage banking dwindles

Supply: Inman evaluation of Wells Fargo regulatory filings

Wells Fargo has seen noninterest revenue generated by its mortgage banking division — together with earnings the financial institution realizes when it resells mortgages it originates — dwindle from greater than $1.3 billion per quarter on the top of the 2021 refinancing increase to simply $79 million through the ultimate three months of 2022.

Get Inman’s Further Credit score E-newsletter delivered proper to your inbox. A weekly roundup of all the most important information on the earth of mortgages and closings delivered each Wednesday. Click on right here to subscribe.

Electronic mail Matt Carter