Wells Fargo (WFC) to Divest Majority of CRE Loan Servicing Unit

Core Viewpoint - Wells Fargo has agreed to divest its non-Agency third-party servicing segment of its Commercial Mortgage Servicing business to Trimont, which will enhance Trimont's position in the commercial real estate lending market [1] Company Summary - The transaction is expected to close in early 2025, subject to customary closing conditions [1] - Wells Fargo will continue servicing Agency/government-sponsored enterprise loans and loans on its balance sheet [1] - The deal will make Trimont the largest service provider of loans in the U.S., managing over $715 billion in U.S. and international commercial real estate loans [1] Industry Summary - High interest rates and a lack of demand for office spaces have led to record high U.S. office vacancy rates, causing financial strain on banks [2] - In response, banks, including Deutsche Bank and Canadian Imperial Bank of Commerce, are reducing their exposure to commercial real estate loans [3] - Deutsche Bank plans to offload nearly $1 billion of its U.S. commercial property loans, while Canadian Imperial Bank of Commerce has signed agreements to divest $316 million in U.S.-based office loans at a discount [3]