Wells Fargo has ended its long reign as the largest mortgage lender among U.S. banks, nine months after announcing plans to shrink the business.
JPMorgan Chase, its biggest rival, now tops Wells Fargo in third-party servicing, origination volume and on-balance-sheet home loans, according to company filings. JPMorgan leapfrogged Wells Fargo in the latter two categories when it bought First Republic Bank in May, and the size of the two firms' servicing portfolios crossed in the third quarter.
Wells Fargo sought the No. 1 rank for years after doubling down on the business when the 2008 financial crisis persuaded most of its rivals to pull back. At one point, the San Francisco-based bank churned out one of every three home loans in the country.
After Chief Executive Officer Charlie Scharf took over four years ago, the question of whether to shrink the mortgage business arose repeatedly. The debate heated up last year, and executives began preparing a retreat, Bloomberg News reported at the time.
The firm announced in January that it would exit correspondent lending — funding home loans arranged by outsiders — and shrink in servicing.
