Wells Fargo Will Buy Loans from Correspondents
Having closed its wholesale lending channel, Wells Fargo said that it will cease funding loans originated by mortgage brokers but that it will continue its relationship with brokers, National Mortgage News reported July 19.
According to National Mortgage News, the nation’s biggest mortgage lender will keep purchasing loans brokered through its correspondent channel.
Wells Fargo announced July 12 its decision to depart wholesale lending in connection with a $175 million settlement with the U.S. Department of Justice. The bank was accused of letting its wholesale lending unit steer minority borrowers into high-cost subprime loans.
The bank denied the allegations, but voluntarily consented to exit the wholesale business to demonstrate that it is “fully committed to fair and responsible lending,” National Mortgage News reported.
However, Wells will continue buying loans from its approved correspondent lenders that fund and close brokered loans in their own names.
“Wells Fargo Correspondent continues to provide liquidity in the secondary residential mortgage market and continues to purchase mortgages sourced from third parties in the primary residential mortgage market from eligible, approved mortgage banks, savings banks, community banks and credit unions who are fully accountable for their respective mortgage origination processes,” a Wells Fargo Home Mortgage spokeswoman told National Mortgage News.