A day after Wells Fargo dropped its wholesale/broker bombshell, the smoke is starting to clear and some industry players are taking a proactive approach to what may lie ahead. In a nutshell, some firms – such as 360 Mortgage – intend to gobble up as much as Wells’ wholesale share as possible. But the real reason for Wells scaling back in mortgages isn’t about broker loan quality. It’s about Basel III rules and how much in mortgage servicing rights it can count toward core capital. In other words: Yes, Wells is a mortgage gorilla but even gorillas can get sick of bananas after awhile. We understand that Wells is now reviewing some of its mortgage joint ventures. More to come on that topic shortly.
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