Wells Engages in ‘Hunger Games’ for Mortgages


If you’re looking for the missing piece to the mortgage “deconsolidation” equation, its name is Wells Fargo. Never before in the annals of residential finance has one company amassed such an enormous market share in lending (27%) and servicing (20%). Its next largest competitor in originations is Chase which is miles behind with a 9% lending share—and falling. Many small- to medium-size firms are gaining. Will Wells ever falter in mortgage banking? That’s hard to say, but that old saying “what doesn’t kill you, makes you stronger” might apply. Wells goes for the jugular—it almost feels like NFL coaches offering cash bounties for taking out opposing quarterbacks. In the HARP 2.0 program Wells is limiting participation of third-party correspondents and brokers not because it’s concerned about risk, but because it wants to shovel that business into its retail arm and earn a huge spread. HARP loans are wildly profitable—or so we’re told by multiple sources including Amherst‘s Laurie Goodman. One mortgage advisor told us that certain firms can earn $10,000 per loan. Some have scoffed at the number, but we are in uncharted territory here, folks. Is there anything wrong with what Wells is doing? Answer: No. This is capitalism. This is Thunderdome, this is Gladiator, this is The Hunger Games…

Just how good is Wells? Years ago I remember having lunch with a Wells sales executive who was either a former college or pro football player. (My memory fails me.) But he was smart and aggressive, and I remember him telling me this: if you see the consumer leaving your office without having signed an application, and you can see the soles of his shoes, you lost…

If you’re looking for the market share numbers for the top 100 lenders and servicers drop an email to Deartra.Todd@SourceMedia. It’s all in the brand new edition of the Quarterly Data Report

BREAKING NEWS ON WELLS: Late Friday our sister publication American Banker reported that the Securities and Exchange Commission has accused Wells Fargo of failing to produce documents relating to an investigation of the bank’s mortgage-backed securities. The SEC filed a subpoena enforcement action in Federal Court on Friday, seeking to force Wells to comply with subpoenas dating back to September 2011.

THE eWAREHOUSEONE MYSTERY CONTINUES: We’re still hearing from nonbank mortgage executives who went down the aisle on a warehouse line with eWarehouseOne, only to get nervous and change course. We can’t get eWarehouseOne’s side of the story anymore since the privately held firm—funded by private equity money and other sources—won’t return telephone calls and emails. Meanwhile, National Mortgage News has learned that industry veteran Henry Brandt went to work for eWarehouse as an account executive (servicing Texas and the Southwest) but left after two weeks—at least that’s what a source very close to Brandt told us. Brandt’s voicemail says he’s on vacation. But as we’ve noted before, maybe all this can be explained away and eWarehouseOne will turn out to be an important source of liquidity for banker-to-broker types…

JUMBO LOANS AND THE STOCK MARKET: As NMN‘s Bonnie Sinnock reported this past week, Redwood Trust is working on another jumbo MBS deal. (OK, so where is the rest of the industry?) But here’s something to think about: the stock market has almost doubled since hitting bottom a few years back and high-income earners must be feeling good about their gains. Why not plow that money into something tangible, like a nice little cooperative on Central Park West or Nob Hill?

STOCK STUFF: National Mortgage News this week added Ellie Mae and Home Loan Servicing Solutions to its Mortgage Industry Equity Composite.

MORE STOCK STUFF: In case you haven’t noticed, Bank of America‘s share price has almost doubled since late November when it briefly fell below $5 a share.

THE NEXT ASSET BUBBLE TO BURST: Student loan debt has topped $1 trillion and we’ve all read the stories about young kids defaulting on their loans. But the real story is this: College tuition is through the roof. (Disclosure: Yes, my oldest will start college this fall. I guess I just have sticker shock.)

WASHINGTON NEWS: The Federal Housing Finance Agency has a “healthy skepticism” about whether its REO bulk sale initiative will work, according to Meg Burns who’s in charge of the sale. Burns told a Hispanic Realtors group that the GSE regulator will not complete a sale if the “pricing comes in too low.” (Reporting by NMN‘s Brian Collins.)

THIS COLUMN IS FOR SALE: For advertising opportunities email Steven.Schloss@SourceMedia.com. (Visits to our website spiked this week thanks to our Wells, HARP and FHA refi coverage, among other important stories.)

LOAN OFFICERS, BRAG A LITTLE: NMN and its sister publication Origination News, the most widely read news magazine in the broker/correspondent sector, has launched its annual loan officer survey. Eventually, we’ll publish features and rankings on the nation’s top LOs. To participate in our survey visit http://originationnews.com/losurvey.

DATA STUFF: If you need contact names and emails on the top players in mortgage banking subscribe to NMN‘s MortgageStats.com product. For more info drop an email to Deartra.Todd@SourceMedia.com and ask about our site license rates.

MUST ATTEND MORTGAGE SHOWS: From April 17-19 National Mortgage News and SourceMedia will hold their annual Mortgage Servicing Conference at the Omni Mandalay Hotel in Irving, Texas. For more information see the ads on our website or email Julie.Dienes@SourceMedia.com or click here http://www.nationalmortgagenews.com/conferences/ms/.

I’m on Twitter, discussing mortgage matters and $4 a gallon gas.

LAST WORD: Gas at $4 a gallon again? Here’s an energy policy for you: drill, drill, drill.

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