Mortgage Blog

Why Wells Fargo Exit the wholesale Market

August 2nd, 2012 10:57 AM by Eric Fang

A lot of borrowers asked me the question, and they
think I should know evreything. Just kidding.

My processor is back from her one month vacation.
That means I can accept a little bit more refinance
loans and I can write more blogs.

Anyway, back to Wells Fargo topic. The first problem
is the Joint Ventures wells Frago with the Builders.
Usually you will see the WF loan agent next to the
office of the sales office of the builders. So the
builder will "advise" you talk to Wells Fargo loan
agent. But it is not exactly Hud required that "the
borrowers can independently choose their own loan
agent". Second, WF was fined for around 300 Million
for their subprime loans they originated during the
prime times. And they blamed it to those "loan agents".
Third, the wholesale loans was only 5% of the loans
they originated. So they don't lose much market share
if they exit the market.

And the last reason was that they already had enough
market share and they don't want any more.

And another interesting data from the above reasons,
why their wholesale loans only 5%? Becuase their rate
is higher than most other wholesale lenders, and
loan agents do not send the loans to them.

I will share more industry news with you guys if more
people are interested.

Posted in:General
Posted by Eric Fang on August 2nd, 2012 10:57 AM



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