As mortgage originations sank at Wells Fargo & Co., the company said it has reduced its mortgage staffing by 4,500.
Home-loan production dropped to $84 billion in the first quarter from $128.0 billion in the prior period, the company said in its earnings report. Fundings were $75.8 billion in the same quarter last year.
Originations can be expected to fall further based on new loan applications, which fell to $102 billion from the prior quarter’s $158 billion. The application pipeline declined to $45 billion from $73 billion.
Loans closed through the company’s retail channel fell to $49 billion from $70 billion in the fourth quarter, while correspondent business dropped to $34 billion from $57 billion.
The residential mortgage servicing portfolio was $1.808 trillion, $1 billion less than at the end of December. The portfolio has grown from $1.798 trillion at the same point in 2010.
The first-quarter total included $1.453 trillion in mortgage serviced for others, growing from $1.429 trillion three months prior.
Residential mortgage holdings ended last month at $226.5 billion, falling from $230.2 billion at the end of last year and $240.5 billion at the same point last year. Junior liens fell to $93.0 billion from $96.1 billion and were $103.8 billion a year earlier.
Home-loan delinquency, including foreclosures, improved to 7.22 percent from 8.02 percent in the fourth quarter.
The commercial mortgage servicing portfolio edged up to $521 billion from $520 billion but was below $564 billion in the first-quarter 2010. The March 31 figure reflected $406 billion in loans serviced for others.
Wells owned $101.1 billion in commercial mortgages, more than $99.4 billion at the end of 2010. Commercial real estate holdings were also higher than $97.8 billion on March 31, 2010. Commercial construction assets fell to $22.9 billion from the previous quarter’s $25.3 billion.
Repurchase demands were outstanding on 11,068 loans for $2.5 billion as of March 31.
Mortgage banking income swung from a $27 million fourth-quarter loss to a $2.0 billion profit. Mortgage losses were $18 million a year ago.
Net income at Wells Fargo & Co. climbed to a record $3.76 billion from $3.41 billion in the final three months of last year. The improvement was even more striking compared to $2.55 billion in the first three months of last year.
Wells disclosed that its staffing levels are being cut substantially as business tumbles. Many of the layoffs are part of a temporary workforce brought on by previously heightened refinance activity.
“As mortgage volumes slowed in 1Q11, actions were taken to reduce retail fulfillment staffing by over 4,500 [full-time employees],” the report said. “Over 2,000 [full-time employees] were notified but still on the payroll at the end of 1Q11 and will be displaced in 2Q11.”
