Fundings Up at Wells, But Delinquency Deteriorates

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Wells Fargo & Co. saw its quarterly home-loan production jump by more than a third, while both its servicing portfolio and mortgage assets grew. But late payments on its mortgages were worse.

Residential loans originated by Wells Fargo Home Mortgage totaled $120 billion in the fourth quarter. The lender’s results were included in Wells Fargo & Co.’s earnings report.

Volume leapt from $89 billion originated in the prior three months. In the same period during 2010, fundings at the financial institution were higher at $128 billion.

Correspondent and wholesale production accounted for $61 billion of fourth-quarter business, while retail made up $58 billion.

Annual originations at Wells Fargo amounted to $357 billion, dropping from the $386 billion originated during 2010.

The San Francisco-based company’s unclosed pipeline of mortgages in process declined to $72 billion from $84 billion at the end of September, pointing to lower first-quarter volume. Further evidence of the current quarter’s slowing can be found with fourth-quarter applications, which fell to $157 billion from the prior period’s $169 billion.

Refinances represented 78 percent of applications, climbing from 74 percent in the prior report.

The servicing portfolio closed out 2011 at $1.822 trillion, growing from $1.814 trillion as of Sept. 30. Wells has pumped up its servicing portfolio from $1.809 trillion as of the end of 2010.

The Dec. 31, 2011, total included $1.456 trillion in loans serviced for others.

Wells Fargo owned $228.9 billion in residential loans, growing the portfolio from $223.8 billion three months earlier.

Delinquency including foreclosures climbed to 7.96 percent from 7.63 percent in the third quarter. But the rate retreated from 8.02 percent recorded for the year-earlier quarter.

Another $100.9 billion in home-equity loans were owned, down from the previous quarter’s $103.1 billion.

HEL 60-day delinquency deteriorated to 4.73 percent from 4.69 percent in the third quarter.

Wells Fargo additionally serviced $0.518 trillion in commercial mortgages, a number that was barely changed from $0.519 trillion at the end of the prior period and $0.520 trillion in the same period during 2010.

Commercial mortgages on the balance sheet grow to $125.4 billion from the third quarter’s $124.1 billion. The fourth-quarter total included $19.4 billion in construction loans.

As of the end of last month, Wells Fargo had 8,714 unresolved repurchase demands for $2.0 billion, bringing down the total from 12,648 loans for $2.948 trillion at the end of the prior year.

Repurchase losses fell to $1.2 billion in 2011 from $1.4 billion in 2010.

At $6.1 billion, Wells Fargo & Co.’s net income before taxes was a quarterly record.

There were 264,200 people employed at the financial behemoth, more than 263,800 as of the end of the September but down from 272,200 at the end of 2010.

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Mortgage Daily Staff

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