Wells Fargo is retreating from the mortgage business, where it's been a longtime industry leader, the bank said earlier this week.High mortgage rates have crushed demand for loans, and the biggest home lenders saw business drop by eye-popping percentages last year.Wells said it would focus on providing mortgages to existing customers and would continue its efforts around increasing lending to Black and Hispanic homebuyers.
. “We are making the decision to continue to reduce risk in the mortgage business by reducing its size and narrowing its focus.” The bank is shrinking its mortgage servicing portfolio, and completely walking away from "correspondent lending," where it buys loans from smaller lenders.Banks have been pulling back from the mortgage business for a while. A majority of home loans now originate at nonbank lenders like Rocket Mortgage and LoanDepot.com.
In 2010, nonbanks originated just 10% of mortgages. By 2022 these companies had 65% of the business, according to data from Inside Mortgage Finance. As of the third quarter of 2022, United Wholesale Mortgage, a Michigan-based public company that works directly with mortgage brokers, became the biggest mortgage lender in the country, per Inside Mortgage Finance.
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