After heavy subprime mortgage losses, Wells Fargo has announced the closure of the Finance Division. Only about 3,800 of the 14,000 jobs within the Finance Division will be lost. Wells Fargo financial products, like line-of-credit loans, will nevertheless be accessible.
The work of Wells Fargo Finance Division
In existence for the last 100 years, the Wells Fargo Finance Division has been separate from Wells Fargo banking services. The Finance Division of Wells Fargo underwrites small loans, auto loan finance, mortgages, and other varieties of financing. The Finance Division presently holds about $ 24.7 billion in real estate loans, and all but $ 1.5 billion is considered subprime. The Finance Division lost almost 5 percent of its value, which is about the very same as other lenders.
Wells Fargo takes over Wachovia
In 2008, Wells Fargo began a federally-pushed merger with Wachovia. The merger added branches and liabilities to the Wells Fargo balance sheets. There are about 6,600 branches of Wells Fargo/Wachovia banks and an additional 2,200 Wells Fargo Home Mortgage offices. Government regulators asked Wells Fargo to take over Wachovia so the smaller bank would not fail. As a separate entity, Wachovia was dissolved in March of 2010.
Wells Fargo plans on continuing to lend money
. Auto loans and fast personel loans will now be offered inside Wells Fargo branches. The company does nevertheless intend on offering mortgages, but rather than subprime offerings, FHA-backed loans can be the focus. These federally backed housing loans are less likely to default, in theory. The current $ 14.7 billion in auto loans and $ 7.6 billion in unsecured personal loans will continue to be serviced by the company.
