By Stephanie Sims
With its recent announcement that it would stop wholesale lending, Wells Fargo has yet another announcement: the company will also start cutting its Realtor joint ventures that engage in mortgage banking activities due to regulation changes.
According to AmericanBanker.com and a Wells Fargo spokesman, the bank plans to cut its joint venture operations down to roughly 14 by early next year. It is estimated that there had been around 80 active joint ventures with agents at the start of 2012.
Though the bank is working on “dissolving alliances,” Wells Fargo did confirm to the website that it would support its current Realtor joint ventures through the remainder of 2012.
In general, under a joint venture arrangement, Wells and the brokerage have joint ownership in a mortgage banking operation. The loans produced through these companies wind up being reported as retail production by Wells.
What do you think? How will this change affect Wells Fargo or any realty companies’ businesses?