Wells Fargo & Co, the largest U.S. mortgage lender, is laying off 925 employees in its home loan unit as rising rates cut into demand for refinancing.
The San Francisco bank provided a 60-day notice on Wednesday to the workers whose jobs will be eliminated nationwide, a spokesman said in a statement. The bank will continue to evaluate its staff levels in response to market conditions, the spokesman added.
Wells Fargo’s mortgage unit is in a “transitional period” as higher interest rates in recent months have made refinancing unappealing, chief financial officer Tim Sloan said on an October 11 conference call with analysts.
The bank made $80 billion in home loans in the third quarter, down 42 percent from the same quarter last year and the slowest quarter for home loans since the second quarter of 2011.
Interest rates on a 30-year mortgage stood at 4.46 percent in the week ending October 11, according to the Mortgage Bankers Association. That’s down from a high of 4.80 percent in September but well above the 3.59 percent mortgage rate from early May.
As mortgage revenue declined, the bank aimed to eliminate jobs to save on expenses. In the third quarter, 5,300 workers in Wells Fargo’s mortgage unit were notified that they would be laid off.