Three years after the signing of the Dodd-Frank Act, Wells Fargo has announced it will end its remaining home-lending joint ventures, blaming the financial-industry overhaul for the demise of the deals that generated 3 percent of the banks mortgage production.
About 300 jobs at Wells Fargo, possibly including some in Charlotte, will be affected.
On Thursday, Wells Fargo said that it is pulling out of the arrangements with the independent mortgage origination companies it co-owned, including one in Huntersville. San Francisco-based Wells Fargo said it will take 12 to 18 months to wind the operations down.
The Huntersville company, HomeServices Lending, on Thursday said it would become a wholly-owned subsidiary of HomeServices of America, a Berkshire Hathaway affiliate.
The transition work has been under way for some time, and is expected to conclude in 2014, a press release from HomeServices Lending said.
At one point, Wells Fargo had roughly 100 joint ventures involved in mortgage lending, Jim Stavenger, head of Wells Fargo Ventures, said Thursday in a phone interview.
Before Dodd-Frank, the bank had one set of rules to follow, he said.
And that made running a multistate, national business much easier, he said.
Dodd-Frank made it more difficult, he said.
What that meant was that each one of our joint ventures then needed to adhere to and be regulated by each individual state. So, state laws were different, state forms were different, state exams were different, state disclosures to customers were different, he said.
It became much more complex to be able to run a business, and all of that complexity led to just a more challenging environment to be able to deliver the kind of products and services that we felt we needed to.
Thursdays decision means 300 Wells Fargo employees will have to find other jobs.
Some team members in Charlotte may be impacted, spokeswoman Vickee Adams said. The company didnt provide an exact figure.
The 300 work mostly in compliance and risk, Stavenger said, although some have management and underwriting jobs.
Well, hopefully, find homes for them in other parts of Wells Fargo, Stavenger said.
For Wells Fargo, Thursdays announcement means the end to a practice the bank began two decades ago, forging business partnerships with affiliates to originate mortgages.
Of the eight affiliates, HomeServices Lending is the only one based in the Charlotte region, a search of public records indicates.
Roberts: 704-358-5248; Twitter: @DeonERoberts
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