A Wells Fargo bank sign. Image courtesy of Mike Mozart / CC BY 2.0

Wells Fargo plans to reduce the size of its mortgage business, making changes that the bank said would see its home lending business focus on bank customers and minority communities.

As part of its new mortgage strategy, Wells Fargo will exit the correspondent lending business and reduce the size of its servicing portfolio, the bank said in a statement yesterday. Wells Fargo added that the planned changes “continue the work the company has advanced over the past three years to simplify this business.”

“Mortgage is an important relationship product, and our goal is to continue to be the primary mortgage lender to Wells Fargo bank customers as well as minority homebuyers,” Kleber Santos, CEO of consumer lending, said in the statement. “We are making the decision to continue to reduce risk in the mortgage business by reducing its size and narrowing its focus. As the largest bank lender to Black and Hispanic families for the last decade, we remain deeply committed to advancing racial equity in homeownership.”

The planned changes include having the bank’s retail team focus primarily on bank customers and underserved communities. The bank said it would deploy additional home mortgage consultants in local minority communities.

Other moves include adjusting Wells Fargo’s existing $150 million investment, known as it special purpose credit program, to include purchase lending. The SPCP initiative was announced last April to help minority borrowers refinance mortgages serviced by Wells Fargo, and the bank said it would broaden the program to include purchase loans given the current market environment.

Wells Fargo also plans to invest an additional $100 million toward racial equity in homeownership, including through strategic partnerships with non-profit organizations and community-focused engagements. The bank said it expects to make ongoing investments in this area in the coming years.

“We will continue to expand our programs to reach more customers in underserved communities by leveraging our strong partnerships with the National Urban League, UnidosUS and other non-profit organizations,” Kristy Fercho, head of home lending and head of diverse segments, representation and inclusion at Wells Fargo. “We also will hire additional mortgage consultants in communities of color.”

The bank said its new strategy will replace the 2016 and 2017 minority homeownership lending commitments made under prior leadership. Wells Fargo last month agreed to a $3.7 billion settlement with the Consumer Financial Protection Bureau related to consumer law violations, including mortgage regulations.

Wells Fargo has mortgage offices in Massachusetts but no retail bank branches.