Wells Fargo announced that it plans to boost its mortgage processing division by bringing on new hires. The San Francisco-based financial services company says that it’s bringing new employees on board as it prepares for higher mortgage volumes that are expected due to lower mortgage rates.
This is a stark contrast from last year when Wells Fargo laid off approximately 1,000 of its employees in its mortgage division because of rising interest rates that drove loan originations down. The bank had planned to reduce its workforce by nearly 27,000 over the next few years to reorganize. It is unclear what the bank plans to do now in the long term.
The majority of the new hires will be in Iowa, Des Moines, and Minneapolis, the same cities where many of Wells Fargo layoffs were in 2018.
Banks all over the U.S. are bracing for surges in mortgage activity that may be fueled by falling interest rates. The majority of the activity is expected to be mortgage refinances. Refinance applications have more than doubled since last year, according to the Mortgage Bankers Association. Purchase activity is also up from a year ago by 10 percent.
Should interest rates drop, even more, new home loans and refinances could skyrocket. Analysts say lawmakers are likely to cut interest rates for the third time this year by the end of October.
This could be good news, not only for Wells Fargo but for other financial institutions and banking employees, as well. As loan applications increase across the board, workers will likely find their way back into the industry.
As the economy fluctuates, what many will likely see is a firing and rehiring trend until automation takes over, which many predict isn’t far behind.