Wells Fargo & Co. in the fourth quarter solidified its position as the nation's largest funder of home mortgages, originating $128 billion of loans during the period, its best showing since the second quarter of 2009.
The nation's second largest originator of home mortgages, Bank of America, will release its results later in the week with its fundings expected to trail Wells by at least $30 billion.
Wells' mortgage banking division, which continues to originate through all three production channels, posted $2.8 billion in noninterest income during the period, a 10% jump from 3Q.
At yearend, Wells serviced roughly $1.8 trillion in mortgages, but it reduced the value of its MSRs by $143 million during the quarter, anticipating higher foreclosure costs in the months ahead.
On Wednesday the megabank joined the crowd of lenders declaring that loan repurchase demands have peaked and appear to be headed downward on a permanent path.
During its earnings conference call, company chief financial officer Howard Atkins said the bank has $2.1 billion of outstanding buyback demands, noting that its current reserve of $1.3 billion in this area is "well enough" to handle the problem. (Buyback demands peaked in 2Q10 at $2.8 billion.)
On Tuesday executives from JPMorgan Chase predicted that its buyback related problems would end this year and other banks are expected to report the same in the weeks ahead. A majority of these repurchase demands come from Fannie Mae and Freddie Mac, but also private label secondary market investors.
All of Wells Fargo earned a record $3.4 billion during the fourth quarter, a 21% gain year over year.
