Wells Fargo to shut down Finance Division

After heavy subprime mortgage losses, Wells Fargo has announced the closure of the Finance Division. Wells Fargo plans on chopping 3,800 jobs from the Finance Division as part of the sizing-down. Wells Fargo financial products, like line-of-credit loans, will still be accessible.

Source for this article: Wells Fargo to shut down Finance Division by Personal Money Store

The work of Wells Fargo Finance Division

Open for over 100 years, Wells Fargo Finance has operated separately from Wells Fargo Banking. The Finance Division of Wells Fargo underwrites small loans, auto loans with bad credit, mortgages, and other forms of financing. Only $ 1.5 billion of the $ 24.7 billion in real estate loans held by the finance division are considered prime. On-level with other lenders, the Wells Fargo Finance Division only lost about 4.6 percent of value in the last quarter.

Wells Fargo takes over Wachovia

Wells Fargo started a merger with Wachovia in 2008. Wells Fargo brought in liabilities as well as branches. There are about 6,600 branches of Wells Fargo/Wachovia banks and an additional 2,200 Wells Fargo Home Mortgage offices. The takeover of Wachovia was forced by government regulators, who wanted to ensure that Wachovia bank would not fail. On March 20, 2010, Wachovia was officially dissolved as a bank.

Wells Fargo to continue lending

Though Wells Fargo is shutting down its Finance Division, it has announced that the bank will nevertheless provide services for customers who are borrowing money. Fast personel loans and auto loans for people with bad credit can be products offered inside Wells Fargo. The business does still intend on offering mortgages, but instead of subprime offerings, FHA-backed loans could be the focus. These federally backed housing loans are less likely to default, in theory. Wells Fargo will continue to service unsecured personal loans and auto loans.