Wells Fargo & Co., the nation's largest mortgage servicer, reported record net income of $1.8 billion in the first quarter, or $1.03 per share, up 18% and 17% from the first quarter of last year, respectively.But Wells Fargo Home Mortgage saw its revenue fall amid lower mortgage lending volume. Revenue from Wells Fargo's mortgage unit was $800 million in the first quarter, one-third lower than during the first quarter of 2003. Wells originated $65 billion of home loans in the first quarter. The company expects to see stronger loan origination activity in the second quarter due to a drop in interest rates in March. Wells took $119 billion in home loan applications in the first quarter, up from $46 billion in the fourth quarter of last year. And the company owned a portfolio of mortgage servicing rights on $725 billion of home loans, up 19% from a year earlier. The company valued its MSR portfolio at $6.1 billion, down from $6.9 billion at the end of 2003.

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