The CEO of Prosperity Mortgage said that the breakup of its 10-year joint-venture with Wells Fargo was “in the best interest of Prosperity’s customers.”
Randy Krout, president and CEO Prosperity Mortgage, based in Washington D.C. area, has told MPA that cutting its ties with Wells and becoming a wholly owned company is an “advantage and will allow the company to be more flexible and nimble,” concerning the types of loans it originates and its execution process.
Wells Fargo announced last week that regulatory issues were pressuring it to end eight joint ventures with correspondent affiliates, including Prosperity, according to an American Banker story.
The decision to cut all JVs was made after months of negotiations between Prosperity’s owners, Wells Fargo and Long and Foster Companies, Krout said. Krout told MPA the decision had nothing to do with regulations.
Prosperity’s ownership was split 50/50 between Long and Foster Companies and Wells Fargo, Krout said. He said Prosperity is now working on winding down that JV structure and creating a new one by January 2014. The company will keep its name, but it will have new legal ownership.
Krout was the former senior vice president of wholesale lending for Wells Fargo in 2000 to 2001.