Wells Fargo & Co., the fourth- biggest U.S. bank by assets, will no longer offer residential mortgages and home-equity loans in Canada.
Wells Fargo’s Canadian unit stopped accepting applications for the loans yesterday at its branches and through its HomePlan broker network, Wells Fargo Financial Corp. Canada President Rick Valade said in an e-mailed statement. The company also informed brokers in a statement on its Web site.
“Wells Fargo continuously reviews its operations and makes appropriate changes to its business model,” spokeswoman Erin Downs said in a statement. “In response to recent analysis of our operations and the current market environment, at this time, we made the decision to stop originating consumer real-estate loans products in Canada.”
“We’ve seen a pattern of a number of namely U.S.-based lenders that have exited the field as things have become difficult in the market,” said Jim Murphy, head of the Canadian Association of Accredited Mortgage Professionals. “It’ll mean less choice, less options for Canadians.”
Lenders that still offer so-called alternative mortgages to Canadians include Home Capital Group Inc. and Equitable Group Inc., as well as some Canadian banks, Murphy said.
Wells Fargo will honor existing mortgage commitments and will continue offering personal loans in Canada, the company said. The Canadian unit is a C$5.5 billion ($5.1 billion) business with 130 branches across the country, where it has operated for more than 60 years, according to the Web site.
Wells Fargo follows other mortgage providers including General Electric Co. that have stopped lending to Canadian homebuyers, including those who may not qualify for typical bank mortgages since the 2007 collapse of the U.S. subprime market.
Wells Fargo is the biggest U.S. mortgage originator, with more than 20 percent market share, according to Inside Mortgage Finance. Mortgage originations by San Francisco-based Wells Fargo surged to $129 billion in the second quarter, up 28 percent from the first quarter, according to company filings.
