Well, at least, not enough to switch lenders.
Almost 2 years removed from the fake account scandal, and we can say that Wells Fargo has done a tremendous job retaining mortgage customers, at least in San Francisco.
Remember, the scandal broke in September, 2016. Wells Fargo admitted to creating millions of fake accounts without the permission of their customers from 2011 to 2016 - an almost unbelievable scandal. Surely, this violation of trust and misuse of personal information would warrant a significant drop off in customer loyalty.
Well, at first blush, the data looks to support that theory. It looks like Wells Fargo has been on a steady decline since mortgage production peaked a couple of months after the scandal, which would make sense.
Mortgages take time to close so it would make sense the pipeline dried out a few months after the scandal first broke.
However, if compared against the rise in interest rates from the St Louis Fed, it actually matches perfectly.
Sure, Wells Fargo may have had some customers cancel accounts, but the trend in originations almost matches perfectly with the increase in interest rates.
As rates go up, originations go down.
I would argue that the drop in customers is negligible to Wells Fargo’s bottom line and probably offset by the rise in housing prices and thus mortgage size.
It is probably safe to say that Wells Fargo, two years removed, has successfully navigated one of the biggest financial scandals of all time.
Data, as always, courtesy of Local Insights. This post also incorporated data from The St. Louis Federal Reserve. We love their data so take a look when you get a chance.