Officials at the bank suggest Wells won’t take much of a hit from the loss of correspondent production. And profitability on the servicing side is expected to improve as the portfolio shrinks.
Outlook for Wells’ participation in FHA market unclear; Biden signs legislation to improve VA appraisals; MBA calls for higher fee on mortgage assumptions; VA revises forms; FHA hosting webinar on quality assurance; Rural Housing Service updates program guidelines.
Wells Fargo was a major player in the jumbo correspondent channel, with a nearly 20% market share. A handful of banks have a strong presence in this category, while nonbank competitors have faced hurdles.
The correspondent channel accounted for 40% of Wells’ originations in 2022, and the bank ranked third among all lenders in the channel. Still, some see Wells’ move as a positive step for the mortgage industry.
Issuance of new Ginnie Mae mortgage-backed securities fell 10% in the third quarter. Purchase-money activity climbed at both FHA and VA, but not enough to offset declines in loan mods and cash-out refinances.
Amid declining volumes, the largest and smallest lenders who sell to the GSEs lost market share while large and mid-sized lenders got a bigger piece of the pie. (Includes two data charts.)
Wells Fargo isn’t trying to be the largest player in the mortgage market. Instead, the bank plans to focus on wealthy borrowers and customers that already have a relationship with the bank.
The gap in GSE servicing volume between Chase Home Finance and Wells Fargo continued to narrow in the second quarter of 2022. (Includes two data charts.)
Commenters said the challenges that servicers face in responding to COVID-related loss-mitigation programs argue against a rush by VA to implement its servicer tier rankings.