Wells Fargo Bank confirmed on Wednesday that it will be laying off about 20 percent of its mortgage production staff because of a drop in its refinancing business.  About 2,300 jobs will be cut from Wells Fargo Home Mortgage principally in North Carolina, Iowa, and Alabama. 

The San Francisco-based lender has said it expects its refinancing business to be lower for the rest of the year as higher interest rates cut demand for refinancing.  The company had already announced two smaller reductions to its mortgage staff, 350 announced in mid-July and a 758 person layoff announced on August 7^th.  Three hundred additional jobs will be cut over the next 11 to 17 months as the company winds down eight joint ventures.  The company said it had just over 11,400 loan officers at the end of last March.

In a staff memo obtained by a number of news agencies, Franklin Codel, head of mortgage production for the bank, said that refinancing had accounted for about 70 percent of the bank's mortgage applications during the first half of the year but that has now dropped to about 50 percent and was expected to decrease further in upcoming months. 

"We've had to recalibrate our business to meet customers' needs," the memo said, "and to ensure we're operating as efficiently and effectively as possible.  Unfortunately, displacements within our team are necessary."

Employees were given 60 days notice of the layoffs on Wednesday. The banks said it will try to retain as many staff as possible by finding them other positions at the bank. 

Wells Fargo is the country's largest mortgage lender writing and servicing one out of five mortgage loans.  The company has written over $100 billion in home loans in each of the last seven quarters.  However it told analysts on July 12 that it did not expect to repeat that in upcoming quarters as mortgage rates rose.