Wells Fargo’s sprawling back offices in India, struggling to process residential mortgage deals amid a coronavirus lockdown, may be the next black eye for America’s beleaguered third-largest bank, mortgage lenders familiar with the matter told The Post.
At stake, they claim, is a frozen pipeline of funding, potentially as much as billions of dollars destined for a network of small independent US lenders.
“Wells’ back office in India is essentially shuttered, so it can’t check off the boxes and process documents from the US it would normally handle,” said one lender, a Wells client. “As a result, Wells is not clearing the loans for funding to US clients in its mortgage purchase transactions with the US lenders who originated the mortgages.”
With businesses closed and more than a billion people across India — including tech and operations staff for US companies’ back offices — ordered to stay home because of the coronavirus pandemic, the ripple effects are battering Wells, observers say.
In the current lockdown, there’s clearly heightened operational risk for US banks and companies with back offices in India, said Odeon Capital bank analyst Dick Bove.
Wells may be among the hardest hit, say lenders in the US familiar with the matter. Among other projects, the bank’s India outpost processes residential mortgage purchase agreements from Wells’ large network of US correspondent banks, known as primary lenders, several of these bankers say. Wells funds the sales of mortgages by these lenders to their customers soon after the ink is dry on the deals.
“Most of the work typically done out of India is continuing to be done from India, and we have not seen an impact to overall productivity,” Wells said in a statement.
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