Wells Fargo made $50bn in residential mortgage loans during Q4 of 2013, according to a Reuters report. That’s less than half the $125bn in loans the bank made in Q4 of 2012 and down from $80bn in Q3.
The bank still posted a profit in the fourth quarter, thanks largely to cost-cutting measures and dipping into a fund it had set aside to cover bad loans, according to Reuters. But its total revenue fell 6% in Q4 as mortgage rates rose and refinancing dropped.
The lending giant made more than one in five home mortgage loans in the first half of 2013, according to Reuters, but even it wasn’t immune to last year’s precipitous drop in refinancings. Refi applications dropped by almost a third across the entire industry between September and December, according to Reuters.
But the refis were feeling the pain long before that. During the summer and fall of last year, several big banks – which had beefed up their mortgage staffs when refis were booming – slashed thousands of jobs in their mortgage units as business dried up. Wells Fargo eliminated more than 4,000 mortgage jobs last year, while Bank of America eliminated more than 3,000. JPMorgan Chase, the nation’s biggest bank, announced plans to eliminate about 15,000 jobs in its mortgage unit over the next two years.
The country’s biggest mortgage lender saw its residential lending drop last quarter to the lowest level since the financial crisis.