The quick jump in interest rates led to 356 layoffs in the home mortgage division at Wells Fargo & Co. The number includes 34 in Minneapolis and 58 in Des Moines, where the division is based.
The Star Tribune reports that rising interest rates have cut into the bank's refinance activity. The average rate on a 30-year fixed rate mortgage Monday was about 4.35 percent, according to BankRate.com. Two months ago it was about 3.7 percent. Guy Cecala, CEO and publisher of Inside Mortgage Finance, told the paper that he estimates that refi voluumes could drop by 30 percent as a result of the hike.
About 8,500 of Wells Fargo’s nearly 20,000 Minnesota employees are employed in the home mortgage division.
The news nicked the lender’s second-quarter profits of $5.52 billion, with mortgage banking income sliding 3 percent.