Wells Fargo Announces Strategic Direction for Home Lending: A Smaller, Less Complex Business Focused on Bank Customers and Minority Communities
January 10 2023 - 4:15PM
Business Wire
Wells Fargo (NYSE: WFC) announced today strategic plans to
create a more focused Home Lending business aimed at serving bank
customers, as well as individuals and families in minority
communities. Notably, the company is exiting the Correspondent
business and plans to reduce the size of its Servicing portfolio.
These plans continue the work the company has advanced over the
past three years to simplify this business.
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Facade of a Wells Fargo bank branch
(Photo: Wells Fargo)
“Mortgage is an important relationship product, and our goal is
to continue to be the primary mortgage lender to Wells Fargo bank
customers as well as minority homebuyers. We are making the
decision to continue to reduce risk in the mortgage business by
reducing its size and narrowing its focus,” said Kleber Santos, CEO
of Consumer Lending. “As the largest bank lender to Black and
Hispanic families for the last decade, we remain deeply committed
to advancing racial equity in homeownership.”
In addition to exiting the Correspondent business and reducing
the size of its Servicing portfolio, Wells Fargo’s strategic plans
include:
- Optimizing the Retail team to focus primarily on bank customers
and underserved communities
- Broadening existing $150 million investment from the company’s
Special Purpose Credit Program (SPCP) to include purchase loans,
given the current market environment
- Investing an additional $100 million to advance racial equity
in homeownership, including strategic partnerships with non-profit
organizations and community-focused engagements; the company
expects to make ongoing investments in this area in the years to
follow
- Deploying additional Home Mortgage Consultants in local
minority communities
“We will continue to expand our programs to reach more customers
in underserved communities by leveraging our strong partnerships
with the National Urban League, UnidosUS and other non-profit
organizations,” said Kristy Fercho, head of Home Lending and head
of Diverse Segments, Representation and Inclusion at Wells Fargo.
“We also will hire additional mortgage consultants in communities
of color.”
The strategic direction for the Home Lending business and
programs to advance racial equity announced today will replace the
2016 and 2017 minority homeownership lending commitments made under
prior leadership. In rapidly changing market conditions, this new
approach provides flexibility to more quickly address customer
needs. Additionally, the Special Purpose Credit Program the company
announced in April that initially focused on lowering rates for
customers refinancing will now broaden to include purchase loans.
This $150 million investment will reduce the costs for individuals
in underserved communities looking to refinance or buy a home,
helping more Black and Hispanic families achieve homeownership.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a leading financial
services company that has approximately $1.9 trillion in assets,
proudly serves one in three U.S. households and more than 10% of
small businesses in the U.S., and is a leading middle market
banking provider in the U.S. We provide a diversified set of
banking, investment and mortgage products and services, as well as
consumer and commercial finance, through our four reportable
operating segments: Consumer Banking and Lending, Commercial
Banking, Corporate and Investment Banking, and Wealth &
Investment Management. Wells Fargo ranked No. 41 on Fortune’s 2022
rankings of America’s largest corporations. In the communities we
serve, the company focuses its social impact on building a
sustainable, inclusive future for all by supporting housing
affordability, small business growth, financial health, and a
low-carbon economy.
News, insights, and perspectives from Wells Fargo are also
available at Wells Fargo Stories.
Additional information may be found at www.wellsfargo.com |
Twitter: @WellsFargo
Cautionary Statement About Forward-Looking
Statements
This news release contains forward-looking statements about our
future financial performance and business. Because forward-looking
statements are based on our current expectations and assumptions
regarding the future, they are subject to inherent risks and
uncertainties. Do not unduly rely on forward-looking statements as
actual results could differ materially from expectations.
Forward-looking statements speak only as of the date made, and we
do not undertake to update them to reflect changes or events that
occur after that date. For information about factors that could
cause actual results to differ materially from our expectations,
refer to our reports filed with the Securities and Exchange
Commission, including the discussion under “Risk Factors” in our
Annual Report on Form 10-K for the year ended December 31, 2021, as
filed with the Securities and Exchange Commission and available on
its website at www.sec.gov.
News Release Category: WF-CF
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version on businesswire.com: https://www.businesswire.com/news/home/20230110005938/en/
Media Jennifer Langan, 213-598-1490
Jennifer.Langan@wellsfargo.com
Investor Relations John Campbell, 415-396-0523
John.M.Campbell@wellsfargo.com
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