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Wells Fargo Slashes More Subprime Jobs, Heads for the Exits

This news hit yesterday in the Associated Press:

Wells Fargo cuts 500 jobs in mortgage unit

Tougher standards means bank will be handling fewer subprime loans

Updated: 12:13 p.m. PT March 20, 2007

SAN FRANCISCO - Wells Fargo & Co. is eliminating more than 500 jobs in a division that makes home loans to high-risk borrowers, adding to the economic distress caused by the decaying subprime mortgage market.

Most of the cutbacks, concentrated in South Carolina, Arizona and California, stem from Wells Fargo’s recent decision to make it more difficult for borrowers with blemished credit records to qualify for subprime mortgages.

go to MSNBC to read the rest of this article

…following on the heels of this article from Reuters on February 21st:

read the rest of this post

Posted by Marc Brinitzer on 03/22/2007 12:15 AM

Comments (4)

subprime, mortgage, bubble, meltdown

4 Comments on Wells Fargo Slashes More Subprime Jobs, Heads for the Exits

MAR

2007

I think Wells Fargo will continue to do sub prime loans, they will just tighten up the strings a little more. This is what I am hearing from our Acct Rep here anyway. Lets face it, too many times loans were made when the L.O. knew the income was not there. Stated income is great, but you have to be realistic in doing so. This has been going on for years. And, as we know years ago the borrower use to be able to walk into his local Bank and take out a signature loan with no collateral. Not so any more, it has to be approved by the big guys at the top. I don't think lending is ever going to be the way it was. Is this all good, who knows, but time will tell.

Thanks for your comment Bob. Subprime will stay around, but the high LTV stated income stuff will become very scarce. The retreat to more sensible qualifying standards is a welcome change.

I'm actually starting to see people who didn't speculate during the runup reenter the market. Lo and behold, they have good jobs, documentable income, good credit scores, and some equity left in their homes! What a surprise. I hope that continues.

Marc, me to my friend. Lets hope we get back to the way we use to lend, and do the job right which means keeping our client in the front of our business. Good luck to you.

Same to you Bob. I'll keep an eye on your blog as well. Thanks!

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