Wells Fargo home mortgage downsizing could hurt Twin Cities

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.