Wells Fargo Shuts Four Construction Loan Offices

In a further sign that real estate lending is softening, Wells Fargo & Co. confirmed Wednesday that it closed four of its 18 construction lending offices last week and laid off about 10% of its workers in that area.

The closed offices are in San Jose, Sacramento, Minneapolis and Phoenix. Mary Essary, spokeswoman for the San Francisco-based bank, said the layoffs affected about 75 people out of 750 in the unit.

She added that some of the cities where Wells is closing offices can be served by other offices that are in Wells Fargo’s Real Estate Group. “The volume in the market doesn’t justify having that many offices,” she said.

Banks nationwide have slowed real estate lending activity sharply as markets have rapidly softened and the nation’s economy has weakened.

Wells Fargo, one of the nation’s largest real estate lenders, is generally credited by bankers and analysts with being astute in the field. However, its stock has been battered lately because of investor concerns over the health of its real estate and corporate buyout loans.

Earlier this week, the bank released third-quarter earnings showing that its profit climbed 6%, to $162.6 million.