Quarterly mortgage originations tumbled on a quarter-over-quarter basis at Wells Fargo & Co. and could retreat even further. Still, mortgage income held up relatively well.
During
the three months ended March 31, 2017, income before income tax expense was just over $7.6 billion, little changed from just under $7.6 billion in the prior three-month period.
The San Francisco-based bank-holding company disclosed the data, in addition to other operational and financial metrics, in its earnings report for the first-quarter 2017.
Income declined from $8.1 billion in the first-three months of last year.
Mortgage banking income fell to $1.2 billion from $1.4 billion in the fourth-quarter 2016 and $1.6 billion in the first-quarter 2016. The latest period’s income was comprised of $0.5 billion in servicing income and $0.8 billion in net gains on mortgage loan origination/sales activity.
Repurchase liability has been slashed to $222 million at the end of the first-quarter 2017 from $355 million twelve months earlier.
Residential loan originations from Jan. 1, 2017, through March 31 totaled $44 billion. Business sank from
$72 billion in the final quarter of last year but was unchanged from the first quarter of last year.
First-quarter 2017 production included $21 billion in retail originations and $22 billion in correspondent acquisitions.
Refinance share sank to 39 percent from 50 percent in the fourth-quarter 2016.
Based on new applications, which fell to $59 billion from
$75 billion in the fourth-quarter 2016, second-quarter volume is likely down even more. Further supporting lower current-quarter volume was the application pipeline, which fell to $28 billion from $30 billion.
The total residential servicing portfolio was $1.539 trillion as of March 31, 2017. The portfolio dipped from $1.552 trillion as of year-end 2016 and was reduced from $1.622 trillion as of the same point last year. Included in the latest total were $1.204 trillion in loans serviced for others.
Loans on the balance sheet secured by one-to-four unit
properties concluded last month at $318.966 billion. Wells Fargo trimmed the asset class from $321.816 billion at the end of last year and $326.058 billion at the same point last year. Last month’s total was made up of $274.633 billion in first mortgages and $44.333 billion in junior lien mortgages.
The financial institution also serviced $606 billion in commercial mortgages, less than $611 billion serviced as of the close of 2016 and $610 billion at the end of the first-quarter 2016. Included in last month’s total were $474 billion in loans serviced for others.
There were $156.596 billion in commercial real estate loans held as investments by Wells Fargo as of March 31, 2017. The CRE total inched up from $156.407 billion three months earlier and expanded from $147.655 billion one year earlier.
The most-recent number consisted of $131.532 billion in commercial mortgages and $25.064 billion in construction loans.
Headcount ended the first-quarter 2017 at 272,800 people,
more than 269,100 as of three months earlier and 268,600 as of a year earlier.
Wells Fargo reported more than 8,500 locations.
