Wells Fargo & Co. announced yesterday that it would be exit all of its joint venture mortgage brokerages due to new federal and state regulations. The San Francisco-based lender is currently the United States' biggest mortgage lender.
Wells Fargo said that approximately 300 employees would be affected by the planned exit. The lender added that not all would lose their jobs right away.
Mortgage production head at Wells Fargo Home Mortgage Franklin Codel said that the shake up is due to regulatory rules that are part of the new Dodd-Frank financial-overhaul law. Mr. Codel stated that the new regulations were the biggest factor in its decision to withdraw from its eight joint-venture businesses.
Wells Fargo had at least 80 joint ventures by 2011. The lender over the past year, however, closed all of the businesses but the eight remaining. The eight brokerages that Wells Fargo kept had the firm's vast majority of the joint ventures' business volume.
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