Wells Fargo Plans to Shrink Its Vast US Mortgage Empire

Wells Fargo is retreating from home lending, marking a significant strategic shift. Despite earning $57 billion in fees over the past decade, the bank faces regulatory challenges and missteps, including a $250 million fine and racial disparities in loan approvals. This move impacts the US housing market, with rising mortgage costs and economic uncertainty. Competitors like Rocket Mortgage are gaining market share, indicating a shift in how Americans buy homes.

What was Wells Fargo's approach to the mortgage market after the financial crisis?

• They aggressively expanded their mortgage operations.

• They exited the mortgage market.

• They partnered with other banks to share risks.

• They focused solely on commercial lending.

What regulatory issue did Wells Fargo face that contributed to their strategic shift?

• A merger with another financial institution.

• A partnership dispute with other banks.

• A lawsuit over commercial loans.

• A fine related to distressed borrowers.

What was one of the disparities found in Wells Fargo's mortgage approvals?

• Higher approval rates for rural areas.

• Lower approval rates for first-time buyers.

• A significant gap in approvals between white and black applicants.

• Faster processing times for online applications.

How is the US housing market affected by Wells Fargo's decision to scale back?

• A rise in economic uncertainty and mortgage costs.

• A decrease in mortgage costs.

• Increased competition among large banks.

• More government intervention in the housing market.

Which competitor is gaining market share as Wells Fargo reduces its mortgage operations?

• Citibank

• Chase Bank

• Rocket Mortgage

• Bank of America