A Wholesale Disappearance

Last week Wells Fargo shut down its wholesale lending division. These are loans that are originated by mortgage brokers but ultimately serviced by Wells. It’s thought that this decision was made because Wells came out on the wrong end of a discrimination lawsuit brought by the Department of Justice. Wells settled for $125 mil. Turns out many of the loans in question here were originated by mortgage brokers. Wells has had enough.

I think this is an interesting problem and one that will affect folks looking for loans. BofA and Chase previously shut their own wholesale divisions. I’ve had several transactions this year where mortgage brokers have originated loans for buyers through Wells Fargo who seem to have had terrific rates lately. My suspicion is that this will affect folks looking to buy now since brokers will now be focusing on other lending sources…and certainly there’s plenty of those, but it sure feels more comfortable to me at least to have a buyer work with a known entity. I know, I kn0w…that’s just my opinion. It’s just that I can’t tell you how many tortuous transactions I’ve been a part of that have featured unknown (to me at least) lenders.

Of course, there are tons of wonderful mortgage brokers working in this area right now. Very competent ones too. It was nice when they could originate for Wells.

Comments

  1. we’re in the middle of a refinance with Wells for 2.8%. sounded too good to be true at the time. hope it makes it to closing.

  2. Jim Minkey says:

    I had a closing this week where the clients had that rate…you’ll be fine

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