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    Wells Fargo builds lead in mortgages via take-over

    23 Nisan 2009 - 00:00Son Güncelleme : 22 Nisan 2009 - 17:50

    SAN FRANCISCO - Wells Fargo’s purchase of Wachovia at the end of last year helped the lender double its mortgage originations in the first quarter and build its lead over Bank of America.

    Wells Fargo lent more than $100 billion for mortgages in the period, while Bank of America funded about $89 billion, including $4 billion in home-equity products, according to statements from the companies. In the previous period, Wells Fargo originated $50.9 billion in mortgages, compared with $50 billion at Bank of America.

    The banks expanded their mortgage units after acquiring home lenders last year. Bank of America purchased Countrywide Financial in July, gaining the nation’s largest home lender, while Wells Fargo bought Wachovia, the biggest issuer of option adjustable-rate mortgages. Wells Fargo, based in San Francisco, picked up branches and customers along the East Coast in purchasing Charlotte, North Carolina-based Wachovia.

    "There was less overlap between Wells and Wachovia vs. Bank of America and Countrywide, which had almost the exact same footprint," Guy Cecala, chief executive officer of industry publication Inside Mortgage Finance, said in a phone interview from Bethesda, Maryland. Wells Fargo "has been more aggressive in terms of mortgage lending across the board."

    Before of America bought Countrywide, it was already among the top banks in Countrywide’s home state. Bank of America has cut back on Countrywide’s subprime operations since the purchase.

    With the Countrywide deal in July, Bank of America catapulted from the fifth-biggest mortgage originator and sixth-largest servicer to number one in both categories. It took a "leadership position in one of the most important products," Chief Executive Officer Kenneth Lewis said when the purchase was announced in January 2008. The bank is still the biggest servicer, Cecala said.

    Home lending nationwide surged 60 percent in the first quarter from the previous period to $407 billion, according to Inside Mortgage Finance. To jumpstart sales and support lending, the Federal Reserve has been buying mortgage bonds and said last month it may purchase $750 billion of securities from Fannie Mae, Freddie Mac and Ginnie Mae.

    Average 30-year fixed mortgage rates dropped to 4.82 percent on April 16 from 4.87 percent a week earlier, according to Freddie Mac, the mortgage finance company. Rates fell below 5 percent this year for the first time in records dating to 1971.Wells Fargo, Bank of America and JPMorgan Chase increased their total market share of originations to 56 percent from 52 percent in the fourth period, Cecala said.


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