By KIMBERLEY HAAS
Wells Fargo released its fourth quarter 2023 financial results on Jan. 12 and leaders there say as they continue to streamline their home lending business profitability will improve.
The company reported a net income of $3.4 billion, or $0.86 per diluted share.
CEO Charlie Scharf said in his comments that the continued execution of their more focused home lending strategy should produce higher returns and earnings over the next several years.
“As we look forward, our business performance remains sensitive to interest rates and the health of the U.S. economy, but we are confident that the actions we are taking will drive stronger returns over the cycle,” he said.
Scharf said their new credit card products have…
By KIMBERLEY HAAS
A grant from the Wells Fargo Foundation will help establish a training program to address the need for credentialed contractors in communities nationwide.
The foundation has a working relationship with Team Rubicon, a veteran-led humanitarian organization that provides relief before, during, and after natural disasters. Leaders there say they continue to see a critical shortage of people with the skills necessary to assist homeowners in the rebuilding process.
Team Rubicon’s new TRades Academy will provide veterans with contracting, electrical, plumbing, and HVAC skills. Trainees will gain the field experience needed to eventually become certified contractors in their own communities, according to a press release.
Wells Fargo has provided a $750,000 grant to support the academy. That money…
Earnings for the third quarter of 2023 are out offering a view into how lenders did. Here’s a snapshot of how some of the nation’s top lenders handled this summer.
Rocket Mortgage
Rocket reported solid earnings with a net revenue boost of 12.8% YOY, though profits remained effectively flat from Q2 at $1.2 billion. Originations totaled $22.2 billion, down 13.2% YOY and also basically the same from last quarter, no big surprise given current market conditions. Its gain on sales margin rose for a third straight quarter, up 2.76%.
“I am very proud of our team for delivering strong results against a challenging economic backdrop,” said Varun Krishna, CEO of Rocket Companies. “In today’s climate, innovation is essential. With the…
The Federal Open Market Committee’s decision to not raise interest rates at its November meeting came as welcome news to the housing industry, leading to a dip in mortgage rates after a streak of increases. But industry analysts are still concerned about a housing recession.
Analysts at Wells Fargo recently warned that a rate cooldown likely won’t lead to a market boost, citing the overall cost of both building and buying a home.
“After generally improving in the first half of 2023, the residential sector now appears to be contracting alongside the recent move higher in mortgage rates,” economists Charlie Dougherty and Patrick Barley wrote in a research note. “Although mortgage rates may gradually descend once the Federal Reserve begins…
By SCOTT KIMBLER
There are signs that Wells Fargo is recovering and will continue to be a key player in the banking industry.
Formerly the nation’s largest mortgage lender, leaders there announced in January strategic plans to create a more focused home lending business aimed at serving bank customers and minority communities. Those plans included exiting the correspondent business and reducing the size of the company’s servicing portfolio.
That news came just days before the company released their Q4 2022 results. Net earnings had fallen to $2.86 billion, or 67 cents a share. Leaders at Wells Fargo noted that the decline was driven by the fall-off in mortgage demand as home lending was down 57% from Q4 2021.
Now, Wells…
By ERIN FLYNN JAY
American homebuyers are getting older and industry leaders are preparing to welcome more Hispanic homeowners in the coming decades.
According to the 2023 Home Buyers and Sellers Generational Trends Report by the National Association of Realtors, members of Gen X between 43 and 57 years old made up 24% of recent buyers. They were followed closely by younger Baby Boomers who, between 58 and 67 years old, represented 23% of recent buyers.
Older Millenials between the ages of 33 and 42 accounted for just 16% of recent purchases.
The typical first-time homebuyer is 36, and the typical repeat buyer’s age climbed to 59 last year. Those are the highest ages recorded, a press release for NAR’s…
Wells Fargo is funding a new initiative from nonprofit UnidosUS to create four million new Latino homeowners by 2030.
HOME, which stands for “Home Ownership Means Equity,” is a new plan to influence systemic change in order to make homeownership available to more Latinos in the U.S.
“We need to make homeownership more accessible, especially in historically marginalized communities,” said Kristy Fercho, head of Diverse Segments, Representation, and Inclusion at Wells Fargo.
Over the next 20 years, Latinos are forecast to account for most new homebuyers in the U.S.
“Between 2020 and 2040, if you’re talking about the homeownership increase, 70% of the new net homeowners are actually Hispanic,” researcher Jun Zhu from the Urban Institute told WFAE. “This is…
Wells Fargo’s net earnings dropped in Q4 2022, pushed down by a settlement and the pressures of a shrinking economy. The bank announced that its net income fell to $2.86 billion, or 67 cents a share. This is half of its profits from the same time last year, which came in at $5.75 billion, $1.38 per share. Leaders at Wells Fargo noted that the decline was driven by the fall-off in mortgage demand. Its home lending was down 57% from Q4 2021. The bank announced this week that it is narrowing its home lending business, exiting the correspondent lending channel and shrinking its servicing portfolio. This move will force a round of layoffs, but it is unclear how many jobs…
By KIMBERLEY HAAS Leaders at Wells Fargo announced this week that they are reducing their home lending footprint and some people are saying it may be big news in the lending space, but will likely not make much of a difference to the average consumer. It was announced Tuesday that the company, formerly the nation’s largest mortgage lender, is exiting the correspondent lending channel and shrinking its mortgage servicing portfolio. Plans are to focus on serving bank customers and members of minority communities. Lawrence White, a professor of economics at the New York University Leonard N. Stern School of Business, sat down with the Mortgage Note to talk about the news on Wednesday. White said he hopes the move by leaders at…
Wells Fargo is reducing its home lending footprint, a move that experts say will have major ramifications in the mortgage industry. Formerly the nation’s largest mortgage lender, the bank announced Tuesday that it is exiting the correspondent lending channel and shrinking its mortgage servicing portfolio. “We are making the decision to continue to reduce risk in the mortgage business by reducing its size and narrowing its focus,” Kleber Santos, CEO of Consumer Lending, said in a statement. The company’s correspondent arm accounted for 42% of its loan originations in Q3 2022. Demand is down across the country due to affordability issues and high mortgage rates. Lenders are seeing originations shrink, resulting in closures and layoffs. Wells Fargo has suffered the…
