Aug 16, 2022 - Business

Wells Fargo home mortgage downsizing could hurt Twin Cities

A Wells Fargo Home Mortgage sign
Photo: Justin Sullivan/Getty Images

Wells Fargo's plan to shrink its home mortgage business could cause pain for the thousands of Twin Cities employees who work in that division for the San Francisco-based bank.

Driving the news: Wells Fargo, long the No. 1 home mortgage company in the U.S., is planning to curb new home lending and related businesses, per Bloomberg, citing anonymous sources.

  • The strategy shift follows new leadership and the bank's struggles to avoid costly regulatory probes and hits to the bank’s reputation, Bloomberg reports.

Why it matters: Wells Fargo Home Mortgage is a major corporate employer in the Twin Cities.

  • Its South Minneapolis office — visible from I-35W — employed 3,800 people as of 2018. It later built a parking ramp to allow for 1,250 more employees.
  • Wells Fargo also has suburban offices with an unspecified number of home mortgage employees.

The intrigue: Job cuts are already underway as home mortgage applications across the industry decrease amid higher interest rates and a cooling housing market. Those cuts will go deeper as Wells Fargo downsizes, Bloomberg reports.

What they're saying: Wells Fargo did not disclose how many job cuts have already occurred, or if any took place in the Twin Cities.

  • "Like others in the industry, we’re evaluating the size of our mortgage business to adapt to a dramatically smaller originations market," spokesperson Tom Goyda told Axios in an email.
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