Wells Fargo announced they were closing 638 Wells Fargo Financial offices, which increased its number of retail branches to 6,600 after the Wachovia merger. The bank also has 2,200 Wells Fargo Home Mortgage offices and will eliminate about 2,800 employees from its Wells Fargo Financial unit and will most likely slash another 1,000 jobs in the next year.
According to Dave Kvamme, chief executive of Wells Fargo Financial in Des Moines, “The nonprime real estate business had really declined dramatically over the last 12 to 18 months.” He believed that that Wells waited too long to convert their loan officers from originating subprime loans to FHA mortgage loans too late. As the non-prime home loans contributed to the increased loan defaults that put the company in a position of risk they no longer were comfortable with. Kvamme continued, “The bank has switched from offering subprime mortgages to offering FHA home loans guaranteed by the government.”
Tags: bad credit home mortgages subprime home loans, Consumer Finance Unit, Wachovia Corporation, Wells Fargo, Wells Fargo Home Mortgage