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Wells Fargo Mortgage Business Overflows

Quarterly mortgage production at Wells Fargo & Co. surged well ahead of the prior period’s numbers and even bested year-earlier originations.

During the three months ended June 30, the company closed $63 billion in new residential loans.

Home-loan activity was well ahead of the $44 billion funded during the first quarter.

This information and other operational and financial results were provided in the San Francisco-based financier’s second-quarter 2016 earnings report.

Recent mortgage originations also fared better than the $62 billion in loans closed during the second-quarter 2015.

In total, the banking organization funded $107 billion in new home loans during the first half of 2016.

The latest amount included $34 billion in retail originations, $28 billion in correspondent acquisitions and $1 billion in home-equity production.

Refinance share dropped to 40 percent in the second-quarter from 45 percent three months earlier.

Wells’ home-loan business might continue to build based on loan applications at $95 billion, an $18 billion increase over the first-quarter amount.

Growing to $47 billion from $39 billion at the end of March, the application pipeline also indicates increased mortgage production.

As of June 30, Wells’ mortgage servicing portfolio was reduced to $1.599 trillion from $1.622 trillion at the end of the first quarter. The recent portfolio also was down from $1.691 trillion reported last year as of June 30.

The latest total included $1.250 trillion in loans serviced for others.

Also, the financial giant accounted for an additional $0.004 trillion in loans sub-serviced for others.

Residential assets amounted to $326.934 billion. Assets on the balance sheet were a little higher than the $326.058 billion documented at the end of March and were up from $324.032 billion at the same point last year.

The June 30, 2016, total consisted of $277.162 billion in first mortgages and $49.772 billion in junior liens.

At $606 billion as of the end of last month, the commercial real estate loan servicing portfolio thinned from $610 billion as of March 31 but grew from $585 billion a year earlier.

At the end of the second quarter of this year, the balance sheet included $151.707 billion in commercial real estate loans. The total grew from $147.655 billion at the end of the first quarter and $141.004 billion at the end of the second-quarter 2015.

Last month’s CRE loan total consisted of $128.320 billion in commercial mortgages and $23.387 billion in construction loans.

Repurchases outstanding fell to $255 million from $355 million as of March 31.

In the mortgage banking unit, the $1.414 billion in earnings brought in was slightly down from first-quarter income of $1.598 billion and second-quarter 2015 earnings of $1.705 billion.

Company-wide, Wells’ $8.2 billion in second-quarter earnings before income taxes was slightly improved over the $8.1 billion earned in the prior three-month period but was still down from the $8.5 billion brought in from April 1 to June 30 a year earlier.

Across the company and its subsidiaries, Wells claimed 267,900 “team members.” Headcount thinned from 268,600 at the end of March but was up from 265,800 at June’s end in 2015.

With 8,600 locations reported as of June 30 this year, Wells had 200 fewer branches than accounted for at the end of the first quarter.

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