The future of the depositories

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Hello, LOs!

Earlier this month, Wells Fargo CEO Charlie Scharf said the bank is considering pulling back on its mortgage and home lending business.

"Mortgage is a hard business," Scharf said at Bernstein's annual Strategic Decisions conference in New York City. He later explained the home lending unit won't be as large because it's not a "standalone profit center."

Scharf also talked about the "reputational" challenges of underwriting loans for Fannie Mae and Freddie Mac, an apparent reference to Wells Fargo not issuing refinancings to Black borrowers at similar rates to other lenders.

In just the past few months, Wells Fargo has cut hundreds of mortgage/ home lending jobs amid nosediving origination volume.

In general, the depository banks have ceded a lot of ground to the nonbanks since the reckoning more than a decade ago. As another downturn hits, do you expect depositories to maintain current levels, or to reduce their mortgage footprints? Maybe even gain market share? Let me know your thoughts by emailing me anonymously at james@hwmedia.com.

James Kleimann

Managing Editor, HW Media

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