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Wells Sees Mortgage Earnings Rise, Marks Up MSRs, Keeps GSE Loans

January 11, 2013

INSIDE TAKE:

Wells Sees Mortgage Earnings Rise, Marks Up MSRs, Keeps GSE Loans

By Paul Muolo / pmuolo@imfpubs.com

Wells Fargo & Co., posted another stellar quarter of mortgage earnings, booking $3.1 billion of noninterest income in its residential finance division, and foregoing $340 million of fee revenue by opting to keep certain loans on its books as opposed to selling them into the secondary market.

Compared to 3Q, mortgage banking profits (excluding interest income) rose 9 percent.

According to an analysis of its earnings statement by Inside Mortgage Finance, the megabank also marked up the asset value of its mortgage servicing rights to $11.54 billion at the end of 4Q compared to $10.96 billion in 3Q. A year ago it valued its MSRs at $12.6 billion.

However, Wells saw residential fundings fall 10 percent to $125 billion in the fourth quarter.

Wells, not surprisingly, ranked first among Fannie Mae/Freddie Mac sellers, according to brand new exclusive numbers compiled by IMF.

 

Poll

With rates higher this year, there has been talk of lenders liberalizing their underwriting standards in an effort to increase volume and make up for lower refis.

Do you think your shop will loosen standards over the coming three months?

Yes, but not by much.
Yes, by a lot.
Yes and, heck, we may even do non-QM lending.
No, not at all.
No and we may even tighten credit.

vote to see results