Wells Fargo & Co. — which is experiencing near-record mortgage application volume — said the "potential is very high" for the current refinancing boom to last well into next year.
Discussing its third quarter earnings, the nation's largest mortgage lender noted that "the potential is very high for every home owner in the U.S., who can refinance, to do so during the next several quarters."
In 3Q, Wells Fargo Home Mortgage took in $194 billion in mortgage applications, and expects submissions to top $200 billion in the fourth quarter.
WFHM — which continues to fund loans in all three production channels — originated $101 billion in product during 3Q, a 26% jump from the second quarter. In 3Q09 WFHM originated $97 billion in home mortgages.
Although Wells' origination business is booming, it continues to mark down the asset value of its mortgage servicing rights. According to figures released Wednesday morning, Wells valued its MSRs at $12.4 billion in 3Q, a 14% decline from the same period a year ago. But during that same period, its servicing portfolio grew by about 16%, according to figures compiled by National Mortgage News and the Quarterly Data Report.
During its conference call, Wells executives downplayed the bank's exposure to the current foreclosure crisis, with company CFO Howard Atkins telling analysts and reporters that, "We believe the issue is overstated and misrepresented."
Atkins added that there is nothing wrong with Wells' foreclosure practices, saying "our affidavits are properly authorized."
He noted that mortgage repurchase claims on the bank are not a huge issue and that buyback demands from the GSEs are actually dropping.
