Wells
Fargo to lay off 350, blames rising mortgage rates
In Response To: A Reverse -
Mortgage NIGHTMARE $273,000 from a reverse mortgage that may have cost her as
much as $1.5 million (RumorMail)
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Higher home loan rates are already having an impact at Wells Fargo & Co., which is laying off 350 workers nationally. Sioux Falls is not part of the cuts, a spokeswoman said. The company is the nation’s largest mortgage lender and servicer, and higher interest rates have curtailed refinancing activity. The average rate on a 30-year fixed mortgage reached a two-year high of 4.51 percent last week, according to McLean, Va.-based Freddie Mac. The San Francisco-based bank employs about 270,000 workers worldwide. Wells Fargo has expanded its workforce in recent years in response to record low mortgage rates, which averaged 3.35 percent in November and December of last year. “The low interest rate environment of the past few years allowed us to staff up to meet the demand we were seeing,” corporate spokeswoman Angie Kaipust said Thursday. “As this fast-paced demand for refinancing is slowing somewhat, we need to reduce staff to align with the business need.” Recent signs of U.S. economic improvement have triggered the rise in mortgage rates, which remain near historic lows. Those record lows benefited both homeowners and mortgage lenders while they lasted. They meant lower borrowing costs for consumers and higher revenue from refinancing activity for mortgage lenders, who repeatedly refinanced some older home loans originally purchased years ago at higher rates. Frank Nothaft, chief economist at Freddie Mac, said higher mortgage rates probably won’t slow the U.S. housing rebound, which is expected to provide more fuel for future economic growth. He attributed the rise in rates to market speculation over the tapering down of the Federal Reserve’s economic stimulus efforts, which include $85 billion a month in purchases of bonds and mortgage-backed securities. “Taper talk leads to increased rates for two reasons, first because market participants anticipate that Fed tapering will increase interest rates in the near future, and second, (because) they see the Fed taper talk as being indicative of a strengthening economy,” Nothaft said in a July 16 report. http://www.argusleader.com/article/20130719/BJUPDATES/130719020/Wells-Fargo-lay-off-350-blames-rising-mortgage-rates |
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