Mortgage Giant Boosts Incomes to Ignite More Lending
August 15, 2014
The nation’s largest mortgage lender is raising commissions of its loan officers in the hopes that the added perk will spur its officers to issue more loans for home purchases.
Wells Fargo & Co. is looking to ramp up the number of its mortgages for home purchases, to make up for a big drop in refinancing applications the past year due to rising rates. Refinancings helped Wells Fargo reach record-breaking annual profits but now that business is softening. In fact, nationwide, loans to refinance existing loans is expected to fall to $96 billion in the fourth quarter, about 75 percent less than in the first three months of 2013, according to the Mortgage Bankers Association.
Meanwhile, mortgages for new home purchases is rising, expected to reach $195 billion by the third quarter of 2015 compared to $115 billion in this year’s first quarter, MBA says.
By offering added commission on performance, “we created a lot of desire for the loan officers to go out and get that extra production,” Franklin Codel, who oversees mortgage origination for Wells Fargo, told Bloomberg. “This creates that little extra incentive.
But to court more of that business, banks are urging loan officers to draw more referrals from real estate professionals and home builders and to expand their networks.
Source: “Wells Fargo Tries Boosting Pay to Fix Slumping Mortgage Revenue,” Bloomberg News (Aug. 14, 2014)
Updated: June 18, 2018