Wells Fargo & Co. experienced a 28% drop in mortgage origination volume in the third quarter and it ended the quarter with a substantially reduced application pipeline due to the decline in refinancing activity.
The San Francisco-based bank reported $80 billion in one-to-four family originations in 3Q, down from $112 billion in 2Q.
Chief financial officer Tim Sloan noted that purchase mortgage volume “remained relatively strong in the third quarter, down 4% from the second quarter, benefiting from the continuing strong housing market,” the CFO said.
Wells Fargo ended 3Q with $35 billion in applications in its mortgage pipeline, down 44% from the prior quarter. Sloan noted that the low application is partially due to a “shortening up” in closing times. He cautioned analysts not to use the pipeline to estimate 4Q originations. “I assume it will be down,” he said, but it would be “premature to guess right now.”
Meanwhile, the nation’s largest mortgage lender reported $1.1 billion in net gains on mortgage loan origination and sales activity in the 3Q, compared to $2.4 billion in the prior quarter.
Total mortgage banking and servicing income totaled $1.6 billion, down 28% from 2Q.
Sloan noted that expenses from
