BUSINESS BRIEFING / BANKING
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Wells Fargo & Co. is planning to open a unit that will provide funding to independent mortgage bankers, according to two people familiar with the matter.
The bank is telling lenders that it may spend as much as $4 billion on a so-called warehouse-lending unit, said David Lykken of Mortgage Banking Solutions. Wells Fargo declined to comment.
Mortgage banks rely on warehouse lending to make loans and then hold the mortgages until they’re sold. Banks that provide the financing are able to bring more loans into their servicing units, where they collect fees.
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