|
Many of the hires will be in Des Moines, Iowa and Minneapolis,
according to the memo. Yet, Wells Fargo, the largest U.S.
mortgage originator according to Inside Mortgage Finance, laid
off hundreds of mortgage employees in these cities just last
year.
Representatives from Wells Fargo did not immediately respond to
requests for comment. It was not immediately clear how many
employees the bank will add.
The about-face comes as banks brace for a surge in mortgage
activity fueled by lower interest rates. Refinancing activity,
which accounts for a majority of mortgage applications, has more
than doubled from a year ago, according to data released by the
Mortgage Bankers Association on Wednesday. Purchase activity has
climbed 10% from a year ago.
Indeed, business could boom further if mortgage rates drop even
more, with U.S. monetary policymakers expected to cut the
benchmark interest rate a third time this year at the end of
October.
Other large banks that also let go of staff https://www.reuters.com/article/us-usa-mortgages-jobs/u-s-mortgage-industry-faces-job-losses-as-refinancing-dries-up-idUSKCN1MS1U0
in 2018 will likely follow Wells Fargo in staffing back up,
according to banking sources. They said some lenders have been
struggling to keeping up with the wave of originations following
sweeping headcount reductions across the industry.
Large banks have laid off thousands of mortgage employees over
the past two years as refinancing applications plunged and amid
increased competition from non-bank entrants like Quicken Loans
Inc.
The financial services industry tends to fire and rehire
thousands of employees as revenue fluctuates, but analysts
thought the most recent decline in the mortgage business would
be permanent as the process has become more automated.
The Wells Fargo staffing plans will be fluid, allowing the bank
to adjust to the market, the memo said.
The latest hiring initiative could throw a wrench into Wells
Fargo's plans to cut costs. In July, the bank warned investors
that 2020 costs would not be lower as previously expected since
the bank hired thousands of employees to improve its risk
management and work through the regulatory fallout from its
various scandals.
The fourth-largest U.S. bank by assets has leaned on cost cuts
to stabilize its bottomline amid sluggish revenue trends. Now,
the San Francisco-based bank must also contend with fresh
macroeconomic uncertainty from a changing interest rate
environment that’s pressuring lending margins across the
industry.
(Reporting by Imani Moise; Editing by Bernadette Baum)
[© 2019 Thomson Reuters. All rights
reserved.] Copyright 2019 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
