Wells Fargo & Co.'s Wells Fargo Home Mortgage said Thursday it will close its nonprime wholesale lending business, which processes and funds subprime loans for third-party mortgage brokers.
In 2006, the business represented 1.6% of Wells Fargo's total residential mortgage loan volume of $397.6 billion.
"Wells Fargo will continue to offer nonprime loans in channels where the company has direct relationships with consumers," said Cara Heiden, Wells Fargo Home Mortgage division president, in a written statement.
Heiden added, "The decision to close our nonprime wholesale lending business has no effect on Wells Fargo's robust prime lending business."
As part of the move, Wells Fargo will close its nonprime wholesale operations in Baton Rouge, La., and Des Moines, Iowa. The move will affect 170 positions in Baton Rouge and 67 in Des Moines.
Shares of San Francisco-based Wells Fargo fell 58 cents to $33.99 in Thursday afternoon trade.
