Wells' Third-Party Home Loan Volumes Rise 111%

Thanks, in part, to last year's acquisition of Wachovia Corp., Wells Fargo & Co. doubled its residential loan production in the second quarter, including a 111% jump in fundings through correspondent mortgage bankers and loan brokers. Overall, Wells funded $129 billion in home mortgages during the period, $57 billion of which came in through third-party sources. The balance was originated through its retail branches and online. However, the company - which released record earnings in 2Q -- provided no breakdown on how much of its fundings came solely from brokers. (The TPO figure was reported as one.) Meanwhile, home equity or second-lien fundings plummeted to $1 billion during the period compared to $3 billion a year ago. Late last year the bank bought Wachovia, a large investor in payment-option ARMs. The Wachovia franchise included the bank's existing residential production unit, which had been bolstered by its 2006 purchase of Golden West Financial of Oakland, then one of the largest funders of POAs. The GWF POAs turned out to be a major headache for both Wachovia and now Wells because of soaring delinquencies. In the second quarter Wells reported residential charge-offs of $1.8 billion, a majority of which are tied to second liens. Wells has $7.6 billion in nonaccruing home loans on its books and another $7.5 billion in nonaccruing commercial loans. Wells is the nation's second largest residential servicer ($1.6 trillion) and largest commercial servicer ($470 billion), according to the Quarterly Data Report.