Wells Fargo & Co (WFC), JPMorgan Chase & Co. (JPM), Bank of America Corp (BAC): Mortgage Rates Are Surging, and It Cost These People Their Jobs

Page 2 of 2

Since both the housing market and interest rates are bouncing back from incredible lows, home purchase volume and housing starts could potentially continue to increase in spite of rising rates. But the decline in refinancing will nonetheless take its toll on banks.

However, Wells Fargo isn’t the only mortgage lender anticipating a drop-off in overall activity. Bank of America Corp (NYSE:BAC) indicated that 83% of its origination volume in the second quarter was a result of refinancing, and U.S. Bancorp (NYSE:USB) indicated that its share of refinancing fell from 71% in Q1 to 59% in Q2.

By cutting these jobs and the associated expense, Wells Fargo again seems to be ahead of the curve. It understands that its pipeline of refinancing is likely to come to an abrupt halt, and it’s adjusting accordingly. While the loss of jobs is disheartening, Wells Fargo investors should applaud the bank’s efforts to maintain profitability.

The article Mortgage Rates Are Surging, and It Cost These People Their Jobs originally appeared on Fool.com and is written by Patrick Morris.

Patrick Morris owns shares of Bank of America and US Bancorp. The Motley Fool recommends Bank of America and Wells Fargo and (NYSE:WFC) owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Page 2 of 2