Wells Fargo Financial to Close 638 Stores, Halt Origination of Non-Prime Portfolio Mortgages

July 7, 2010 No Comments »

wells fargo financial

Wells Fargo plans to close 638 Wells Fargo Financial stores across the United States as part of a wide-scale restructuring, the company said today in a press release.

The move will result in roughly 3,800 layoffs, with the remaining 10,000-odd employees expected to be re-assigned to other Wells Fargo businesses.

Additionally, the company will halt the origination of non-prime portfolio mortgage loans, which are higher risk loans kept on a lender’s books instead of being sold on the secondary market.

Wells Fargo expects the restructuring to cost approximately $185 million, with $137 million recorded during the second quarter of 2010, and the remainder during the second half of 2010.

The San Francisco-based bank and mortgage lender said less than two percent of all its real estate loans were originated in Wells Fargo Financial stores during the first quarter, so the impact should be quite minimal.

Wells Fargo Financial branches offered FHA loans, auto loans, and credit cards, all of which will now be available via the company’s network of community banking and mortgage stores.

Thanks to their merger with Wachovia in 2008, Wells Fargo has 6,600 bank branches and 2,200 Wells Fargo Home Mortgage locations nationwide.

Today’s news mirrors a similar strategy employed by Citi, which announced the closure of nearly 400 CitiFinancial branches last month.

Check out the updated list of mortgage-related layoffs, closures, and mergers.

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