Wells Fargo expects to see its mortgage originations to drop by $32bn in the third quarter as job cuts continue, according to a Wall Street Journal report.
Speaking at an analysts’ conference Monday, Wells Fargo Chief Financial Officer Tim Sloan said that the lending giant projects about $80bn in originations in the third quarter, down from $112bn in Q2. Sloan said that Wells Fargo, the nation’s largest home-loan company, saw a slowdown in originations as mortgage interest rates spiked during the summer.
Sloan also said the bank will continue to eliminate positions in the third quarter. Wells Fargo has already cut 3,000 jobs this year, citing a slowdown in mortgage activity.
"The main driver is less refinancing volume than we saw last year and even early this year," Wells Fargo spokesman Tom Goyda told USA Today last month. "We needed to respond to better align our team with the market."
The lending giant also faces legal woes, battling multiple lawsuits over its mortgage lending practices. Wells Fargo is one of several banks named in a lawsuit which alleges that mortgage fraud by major lenders cost the state of New York up to $100 million. The bank is also on the hook for two class-action lawsuits that claim it violated its contractual obligations when processing home loans under the Home Affordable Modification Program, a federal program to help distressed homeowners avoid foreclosure.