A sign hangs from a branch of Banco Santander in London, U.K., on Wednesday, Feb. 3, 2010.
Simon Dawson | Bloomberg via Getty Images
Banks and other mortgage providers have been battered by plunging demand for loans this year, a consequence of the Federal Reserve’s interest rate hikes.
Some firms will be forced to exit the industry entirely as refinance activity dries up, according to Tim Wennes, CEO of the U.S. division of Santander.
He would know: Santander — a relatively small player in the mortgage market — announced its decision to drop the product in February.
“We were a first mover here and others are now doing the same math and seeing what’s happening with mortgage volumes,” Wennes said in a recent interview. “For many, especially the smaller institutions, the vast majority of mortgage volume is refinance activity, which is drying up and will likely drive a shakeout.”
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