Wells Fargo exits correspondent lending market

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  1. Wells Fargo exits correspondent lending market

Wells Fargo, the largest depository mortgage lender in America, announced that it will officially exit the correspondent channel and also reduce its servicing portfolio, the country’s largest.

The move came as a result of concerns about “reputational risk” when financing large amounts of loans originated from other firms.

Wells Fargo CEO of consumer lending, Kleber Santos, stated the bank will continue to be the primary mortgage lender to Wells Fargo bank customers and minority homebuyers through its mortgage retail team and that the bank is committed to advancing racial equity in homeownership.

Analysts stated Wells Fargo's exit of the correspondent lending market could benefit other big correspondent mortgage originators, but that this could lead to weaker pricing, resulting in higher borrower rates for FHA borrowers.

 2. Consumers regain confidence in housing market as home prices fall

A monthly housing sentiment index from Fannie Mae showed sentiment improving from November to December, but it's still lower than it was a year ago.

By the numbers: The share of respondents saying now is a good time to buy a home is still low at 21%, but it's up from 16% in October.

More consumers now believe home prices will fall in the next 12 months, and more also said they believe mortgage rates will come down.

3. Meta introduces solution to combat discrimination in housing advertisements

Meta Platforms, which used to be known as Facebook, announced they are rolling out a new system called Variance Reduction System (VRS) to address discrimination in housing advertisements.

This is part of a settlement they made with the Department of Justice (DOJ) after the DOJ filed a lawsuit against them claiming that their advertising system had a "discriminatory algorithm" that violates the Fair Housing Act.

They will be subject to court oversight and regular review of their compliance with the settlement through June 27, 2026.

This is a big step in holding Meta accountable for discrimination on their platforms, and it sends a strong signal to other tech companies that they too will be held accountable for discrimination in their algorithms

 4. Catch up quick

💼 American Pacific Mortgage hires 150 AmeriFirst Financial employees (Housing Wire)

📎 Something big is happening in the U.S. housing market—here’s where 27 leading research firms think it’ll take home prices in 2023 (Fortune)

👨‍⚖️ Rocket Mortgage, Former Employees Fight In 2 Courts (NMP)

5. Meme Corner

☀️ That's all for today.

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