Third-quarter profit for Wells Fargo & Co., the biggest U.S. mortgage lender, jumped 13 percent as a decline in revenue from mortgage lending was offset by reduced expenses and fewer soured loans. THE RESULTS: Net income increased to $5.6 billion in the July-September period from $4.9 billion a year earlier. On a per-share basis, earnings were 99 cents, beating the 97 cents forecast by Wall Street. Third-quarter revenue dipped to $20.5 billion from $21.2 billion, coming in below the analysts’ forecast of $21.1 billion.
In what comes as the latest proof of diminishing attractiveness of the mortgage servicing industry, banking giant Wells Fargo (WFC) is reportedly looking to sell a portfolio of mortgage servicing rights (MSRs) worth about $41 billion [Wells Fargo Said to Be Selling Mortgage Servicing Rights, Bloomberg,
Over the past week, most of the major banks in the mortgage sector have been issuing guidance to investors regarding the outlook for mortgage lending volumes going forward in 2014 and beyond. For the past several months, I have been worried about the transition from refinancing to purchase volumes, both for banks and non-banks. The good news is that the mortgage loan refinance boom lasted longer than many anticipated. The bad news is that the industry data and operational announcements by financial institutions have a decidedly bearish slant.
By Saibus Research:JP Morgan Chase (JPM) and Wells Fargo (WFC) reported record profits in their third quarter earnings from increased volumes of lending. As the housing market has slowly recovered, these two nation-wide mortgage lenders have "banked" in on the opportunity.