In the face of a declining mortgage market and heightened regulatory scrutiny, Wells Fargo, the country’s largest depository mortgage lender by volume, is planning for a smaller footprint in correspondent lending and third-party servicing business.

The depository bank will likely shrink or potentially halt correspondent lending, in which Wells Fargo funds the loan arranged by outsiders, Bloomberg reported, citing unnamed sources. The concern for Wells Fargo is that the bank would be responsible for any “reputational damage” when it finances large amounts of loans originated from other firms, Bloomberg said. 

The bank’s third-party servicing business is expected to details ⇒

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