Wells Fargo Mortgage will lay off 40 Colorado Springs employees next month as a result of declining refinance volume triggered by higher mortgage rates in recent months.
The layoffs are part of a nationwide cutback of 1,900 employees announced last month by the San Francisco-based banking giant.
Wells Fargo notified the employees Sept. 18, giving them 60 days notice of the layoff. The bank is also trying to place as many as possible in open positions at other locations, said Cristie Drumm, a Wells Fargo spokeswoman in Denver. Laid-off employees will receive severance packages based on their time with the company, but all will receive help finding new jobs, she said. Wells Fargo, the largest bank in the Colorado Springs area, employs nearly 1,000 at its 19 branches and mortgage call center.
"We made this decision as the result of less mortgage refinancing volume than we experienced last year and earlier in 2013. After taking a look at the current, market conditions and our business needs, we are reducing the positions to respond to this change in demand and better align and increase the efficiency of our organization," Drumm said.
Mortgage volume has declined in recent months as interest rates jumped from an average of 3.35 percent in early May to 4.58 percent by late August, according to a weekly survey by the Federal Home Loan Mortgage Corp., better known as Freddie Mac. In response, both housing construction and existing home sales have slowed.
No local Wells employees were part of another round of cuts this month, which eliminated 11 jobs in the Denver area and 914 nationwide, Drumm said.
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