Wells Fargo & Co. said it will withdraw from more than a half dozen joint ventures in a move that will impact hundreds of employees.
The San Francisco-based company says that it first started forming mortgage joint ventures on a national basis more than 20 years ago.
But earlier this year, Wells Fargo disclosed that it had decided to start dissolving several of its joint venture alliances. The decision followed a “careful analysis of marketing conditions and the impact of the regulatory environment on business,” the company said at the time.
Among the impacted joint ventures was Edward Jones Mortgage LLC.
On Thursday, an announcement indicated that Wells Fargo Ventures LLC, a subsidiary of Wells Fargo Bank, N.A., would withdraw from its eight joint ventures in mortgage lending.
The impacted joint ventures are Bankers Funding Company LLC, Colorado Mortgage Alliance LLC, DE Capital Mortgage LLC, Home Services Lending LLC, Military Family Home Loans LLC, Prosperity Mortgage Co., Premia Mortgage LLC and Private Mortgage Advisors LLC.
The exit process will begin immediately and complete during the next 12 to 18 months.
Customer service is not expected to be impacted during the exit process. Applications already in the pipeline will continue to be processed by the joint venture.
“The decision is based on the current regulatory and market environment as changes in state and federal oversight have increased the complexity and difficulty of operating mortgage joint ventures,” today’s statement said.
Wells Fargo Executive Vice President – Head of Mortgage Production Franklin Codel noted in the announcement that the decision reflects the lender’s “response to new operating realities and our commitment to continuously improving our business model.”
Around 300 Wells Fargo employees currently support the mortgage joint ventures, according to a written statement from Wells Fargo Vice President, External Communications Vickee Adams.
Jim Stavenger, who is the senior vice president that heads up Wells Fargo Ventures, explained in the announcement that the lender will “work to retain as many impacted team members as possible through other opportunities at the company.”
