Quarterly mortgage originations strengthened at Wells Fargo & Co. and are poised for another quarter-over-quarter increase. But the financial services giant failed to set a new record in net income for the first time in 16 quarters.
From April 1 through June 30, the San Francisco-based company closed $47 billion in home loans, according to second-quarter earnings data released Friday.
Business jumped from the prior three-month period, when Wells Fargo originated $36 billion.
The latest activity brought year-to-date volume to $83 billion.
But residential loan production has plummeted compared to the same quarter last year, when volume amounted to $112 billion.
Retail originations accounted for $25 billion of second-quarter 2014 production, and correspondent-wholesale made up $21 billion.
Just over a quarter of the latest numbers were refinances. Refinance share diminished from a little more than a third in the first quarter.
New applications, an indicator of upcoming originations, increased 20 percent from the first quarter, while the application pipeline was up 11 percent.
The residential servicing portfolio closed out last month at $1.792 trillion.
Wells Fargo serviced $1.807 trillion three months earlier and $1.845 trillion 12 months earlier.
The second-quarter 2014 servicing portfolio reflected $1.451 trillion in third-party servicing and $0.341 trillion in owned-loans serviced.
Mortgage delinquency on the servicing portfolio worsened to 5.64 percent from 5.56 percent but was 101 basis points better than mid-year 2013.
First mortgages on the balance sheet inched up to $260.104 billion from $259.478 billion as of March 31 and have expanded from $252.841 billion as of June 30, 2013.
Investments in junior liens were trimmed to $62.455 billion from $63.965 billion and stood at $70.059 billion at the end of the second-quarter 2013.
Junior lien 60-day delinquency improved to 2.39 percent from 2.45 percent at the end of the first quarter.
At $538 billion, the commercial mortgage servicing portfolio increased from $532 billion as of March 31 and $514 billion as of the same date in 2013.
The latest CRE servicing portfolio reflected $429 billion in mortgages serviced for others and $109 billion in owned loans serviced.
Wells Fargo’s commercial real estate loan portfolio expanded to $125.474 billion from $124.584 billion at the end of the first quarter and $121.115 billion at the same point last year.
The June 30, 2014, CRE loan total included $108.418 billion in real estate mortgages and $17.056 billion in real estate construction loans.
As of the end of last month, Wells Fargo had 1,345 unresolved repurchase demands and mortgage insurance rescissions with an original loan balance of $295 million.
Mortgage banking income climbed to $1.723 billion from $1.510 billion in the first quarter. But earnings from the unit were off sharply from $2.802 billion in the second-quarter 2013.
The bank-holding company earned $8.655 billion before taxes, climbing from $8.352 billion three months earlier and $8.471 billion a year earlier.
The $5.726 billion in after-tax net income represented the first time since the second-quarter 2010 that the San Francisco-based company didn’t earn a record amount.
Company-wide staffing was reduced to 263,500 employees from 265,300 at the end of March. Mid-year 2013 headcount was higher at 274,300.
