CNN
 — 

Wells Fargo is set to sell the majority of its commercial mortgage servicing business to global loan services provider Trimont, the companies said Tuesday.

The move would make Trimont the largest loan servicer in the US industry, according to rankings from the Mortgage Bankers Association.

Wells Fargo’s deal to sell off its non-agency third-party Commercial Mortgage Servicing business comes as the banking sector in the United States faces increasing pressure due to elevated interest rates and challenges in the commercial real estate market.

Founded in 1988, Trimont is a specialized commercial real estate loan services provider that provides services to help lenders manage and grow their commercial real estate loans.

The deal is expected to close in early 2025, pending certain conditions, and will result in Trimont managing over $715 billion in US and international commercial real estate loans.

The “strategically important transaction” will position Trimont to be a key partner to real estate capital providers, said Jim Dunbar, chair of Trimont and partner at Värde Partners.

Commercial real estate markets, particularly in the United States, have suffered a sharp fall in valuations since 2021 after office vacancy rates jumped in the wake of the pandemic, with analysts predicting further challenges for lenders and property owners in the near future.

Last year, Wells Fargo announced a significant shift in its mortgage business, saying it would be focused on serving bank customers and minority homebuyers instead of acquiring new customers.

The lender also said it would exit its correspondent business, which buys loans made by other lenders; and reduce the size of its mortgage servicing portfolio.

Wells Fargo has long been one of the biggest players in the mortgage business, but was dogged by a slew of scandals in 2016 that led to regulatory action and billions of dollars in fines. Its then-CEO, John Stumpf, agreed in 2020 to a lifetime ban from the banking industry and a $17.5 million fine for his role in leading the bank through its massive fake accounts scandal and other sales practice misconduct.