After heavy subprime mortgage losses, Wells Fargo has announced the closure of the Finance Division. Only about 3,800 of the 14,000 jobs in the Finance Division will be lost. Wells Fargo financial products, like line-of-credit loans, will nevertheless be accessible.
Article resource: Wells Fargo to shut down Finance Division by Personal Money Store
What the Finance Division does
Wells Fargo Banking and Wells Fargo Financial have been two separate divisions for over 100 years. The Finance Division has been responsible for providing small loans, large loans, auto financing and mortgages. With $ 24.7 billion in real estate loans within the Wells Fargo Finance Division, only $ 1.5 billion of them are “prime”. On-level with other lenders, the Wells Fargo Finance Division only lost about 4.6 percent of value within the last quarter.
The Wells Fargo merger with Wachovia
Wells Fargo began a merger with Wachovia in 2008. The merger added branches and liabilities to the Wells Fargo balance sheets. Considering that Wells Fargo and Wells Fargo Home Mortgage have a combined 8,800 branches, it’s not a surprise that you will find “too many”. The takeover of Wachovia was forced by government regulators, who wanted to ensure that Wachovia bank would not fail. Formally, Wachovia was dissolved on March 20, 2010.
Lending at Wells Fargo will continue
Though Wells Fargo is shutting down its Finance Division, it has announced the bank will nevertheless provide services for customers who are borrowing money. Inside Wells Fargo branches, fast personal loan and auto loan financing will nevertheless be offered as a part of the banking products. The Wells Fargo mortgage loan business is going to be focusing more on loans backed by the Federal Housing Administration. Loans are less likely to default back to the bank when they’re supported by the federal government. Wells Fargo will continue to service unsecured personal loans and auto loans.
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