New loan originations strengthened at Wells Fargo & Co. and are headed even higher based on the company’s pipeline. Delinquency, however, was another story. Quarterly earnings at the company rose to an all-time high.
Third-quarter originations at Wells Fargo Home Mortgage were $89 billion, according to earnings data released Monday. Business jumped from the prior period’s $64 billion.
Third-quarter volume included $43 billion in retail production and $45 billion in correspondent-wholesale business.
Applications strengthened again, this time rising 55 percent from the prior quarter to $169 billion and pointing to higher fourth-quarter volume. The unclosed pipeline swelled to $84 billion at the end of third quarter from $51 billion three months earlier.
But home-loan production was lower than a year earlier, when $101.2 billion in home loans were funded.
During the first nine months of 2011, Wells has originated $237 billion.
The managed residential mortgage servicing portfolio closed out the third quarter at $1.814 trillion, off slightly from $1.810 trillion at the end of the second quarter. As of Sept. 30, 2010, the servicing portfolio stood at $1.808 trillion.
Last month’s total included $1.457 trillion in mortgages serviced for others, off from $1.464 trillion three months earlier.
Wells Fargo owned $223.8 billion in first-lien mortgages as of Sept. 30, growing from $222.9 billion as of June 30. The total was $228.1 billion a year previous.
Junior-lien holdings were $88.3 billion, slipping from $89.9 billion. The balance was down from $99.1 billion at the same point last year.
Residential delinquency including foreclosures was 7.63 percent, worse than the second quarter’s 7.44 percent. The deterioration was attributed to seasonality. But Wells has made headway since the third-quarter 2010 when the rate was 8.14 percent.
Commercial real estate loans on the balance sheet climbed to $124.1 billion from the second quarter’s $122.8 billion. The third-quarter total included $104.4 billion in commercial mortgages and $19.7 billion in real estate construction loans.
The company has been hacking away at its total outstanding repurchase demands, which were trimmed to $2.0 billion from $2.2 billion three months prior. Repurchase demands a year prior stood far higher at $3.8 billion.
Mortgage banking income climbed 13 percent from the second quarter to $1.8 billion in the third quarter. But the segment saw earnings fall 27 percent from a year prior.
The San Francisco-based firm earned a record $4.1 billion in the third quarter across the entire company, growing from $4.0 billion the prior period and $3.3 billion in the same period last year.
