A slowdown in the residential mortgage market has prompted Wells Fargo (NYSE: WFC) to slash 1,900 jobs, which amounts to less than 1 percent of its overall workforce, reports Bloomberg. This will be disappointing news for some, who had hoped that the housing market would be picking up with more gusto by now. The foreclosure fiasco, the rise in interest rates, and lingering economic jitters has made that less likely, and we may see other banks follow suit by paring staff.

Wells Fargo mortgage originations fell to $386 billion in 2010 from $420 billion in 2009. Pending mortgage applications fell to $73 billion at the end of the fourth in 2010 from $101 billion at the end of the third quarter. The news will be disappointing for other reasons. Many banks face increasing pressure to better handle modifications and foreclosures.

Some, like Bank of America (NYSE: BAC), have been staffing up in this area, as more hands are needed to get back to foreclosure basics. Bank of America had been shifting staff from other parts of the bank into foreclosures. You would think that Wells Fargo would have similar needs. It may be that some employees were shifted but not so many that layoffs were avoided completely.

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