Several Wells Fargo Mortgage Bankers Were Rewarded With California Retreats Before They Were Laid Off

Hundreds of Wells Fargo mortgage bankers were laid off this week as a result of the bank's recent strategic shift, Trade Algo has learned.

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A number of top producers were laid off thanks to the layoffs announced Tuesday, including a few bankers who generated over $100 million in loan volume last year and attended an internal sales conference recently for high achievers, according to people with knowledge of the situation.

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Wells Fargo is stepping away from some of the U.S. mortgage market, an arena in which it once dominated, under the leadership of CEO Charlie Scharf. The bank is focusing more on providing services to its existing customers and minority communities, instead of attempting to increase its share of American home loans. Over the past year, Wells Fargo, JPMorgan Chase, and a number of other firms have had to cut thousands of mortgage positions due to sharply rising interest rates, which led to a collapse in loan volumes.

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The people who declined to be identified in an interview about personnel matters said that those who were cut this week at Wells Fargo included mortgage bankers and home loan consultants, a workforce located throughout the country and paid mostly based on sales volume.

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There have been a number of bankers cut by the company who are located in areas outside the company's branch footprint and who as a consequence do not fit in the new strategy of catering to existing customers, people said. One of the people who spoke with us said that the cuts would affect bankers across the Midwest and along the East Coast.

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Palm Desert resort

The success of some of these people was such last year that they were flown to Palm Desert, California, for an event sponsored by the company earlier this month for a conference that they attended. In addition to its warm climate and golf courses, Palm Desert is also known to be a luxury enclave that is close to Palm Springs.

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There’s a common practice in finance to reward top salespeople with multi-day events held in swanky resorts that combine recognition with recreation and educational sessions in order to reward them for their excellent performance. During the month of April, JPMorgan's mortgage division will be holding a sales conference.

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In a statement to the media, a Wells Fargo spokesperson said the bank had communicated with affected employees, provided severance and career guidance, and tried to retain as many workers as possible.

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According to her, the company announced strategic plans in January to create a more focused home lending business. “Hence, we have made a number of changes in our home lending business in accordance with this strategy and in response to significant declines in mortgage volumes as a part of these efforts.

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She added that the bank's centralized sales channel will continue to serve customers "in any market in the United States."

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Hitting your numbers

There is no reason to believe that Wells Fargo's latest round of cuts is the result of employees' performance, but the company has also been laying off mortgage workers who don't meet minimum requirements for production.

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There is a possibility, according to a source, that the number of loans could be at least $10 million over the past 12 months in areas with expensive housing.

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According to the bank, mortgage volumes declined 70% in the fourth quarter of last year, falling to $14.6 billion from $20.5 billion in the previous quarter. In 2022, Wells Fargo is expected to have almost 11,000 fewer employees than it did in 2021.

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One of the people said that recruiters swarmed top performers following the January mortgage announcement, which was reported first by Trade Algo.

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Scharf outlined his rationale for the mortgage retrenchment in a town hall meeting on Jan. 25