Wells Fargo introduces changes for home loans in diverse communities
Its new focus hopes to simplify some processes.
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Wells Fargo, the leading mid-market financial services company in the U.S., with approximately $1.9 billion in assets, recently announced its strategic plans to target home loans to serve bank customers, as well as individuals and families in multicultural communities.
The banking giant, which is currently limiting its presence in the agent business and plans to reduce the size of its service portfolio, is completing a three-year process to make mortgage transactions simpler.
Kleber Santos, CEO of Consumer Lending, pointed out:
As the largest bank lender to Black and Hispanic families for the last decade, we remain deeply committed to advancing racial equity in homeownership.
In addition to exiting the agent business and reducing the size of its service portfolio, Wells Fargo's strategic plans include:
- Optimizing the Retail team to focus primarily on bank customers and underserved communities
- Broadening existing $150 million investment from the company’s Special Purpose Credit Program (SPCP) to include purchase loans, given the current market environment
- Investing an additional $100 million to advance racial equity in homeownership, including strategic partnerships with non-profit organizations and community-focused engagements; the company expects to make ongoing investments in this area in the years to follow
- Deploying additional Home Mortgage Consultants in local minority communities
“Mortgage is an important relationship product, and our goal is to continue to be the primary mortgage lender to Wells Fargo bank customers as well as minority homebuyers. We are making the decision to continue to reduce risk in the mortgage business by reducing its size and narrowing its focus,” added Santos.
After taking investors on a bumpy ride this year, what might the economy and markets hold for 2023? See our insights to help plan your strategy for the coming year. #2023Outlook— Wells Fargo (@WellsFargo) December 16, 2022
The recently released strategic direction for home lending business and programs to advance racial equity will replace the 2016 and 2017 minority homeownership loan commitments created under previous leadership.
This new approach provides flexibility to more quickly address customer needs and will allow for the inclusion of purchase loans.
The $150 million investment seeks to reduce costs for people in diverse communities looking to refinance or buy a home, helping more Black and Hispanic families become homeowners.
“We will continue to expand our programs to reach more customers in underserved communities by leveraging our strong partnerships with the National Urban League, UnidosUS and other non-profit organizations. We also will hire additional mortgage consultants in communities of color,” highlighted Kristy Fercho, head of Home Lending and head of Diverse Segments, Representation and Inclusion at Wells Fargo.