Every chance they get, investors quiz Wells Fargo executives on just how much longer the bank can make so much money in the mortgage business.
Perhaps that's why the San Francisco bank sent home lending head Mike Heid to present at the BancAnalysts Association of Boston Conference this morning.
His answer? At least a while longer.
Wells Fargo, the largest U.S. home lender, has ridden home refinancings to quarters of record profit over the past few years.
Heid said the bank should have a strong fourth quarter as well, going by the unclosed pipeline of loans at the end of the third quarter.
He also cited a large number of Wells Fargo customers who are good candidates for refinancing -- high interest rates and credit scores and a low loan-to-value ratio -- who haven't done so yet.
The bank has added 7,000 home mortgage employees in the last 15 months to catch up with the demand. That came after the bank dropped 5,000 employees in the unit from the end of 2010 to the middle of 2011. Heid said that's an indication that Well would be able to quickly cut costs should refinancings dry up.
Apart from being very profitable at the moment, Heid said that customers who have mortgages with the bank also tend to have a larger number of other financial products with Wells -- the key measure of the bank's emphasis on cross-selling.
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2 comments:
They should be able to make money on mortages for as long as the gubmint continues to give them access to cheap loans.
I just wish the gubmint would loan the money directly to me at the rate they loan it to these unnecessary intermediaries.
Considering the current state of the economy, mortgage brokers have to work harder than ever before to earn a living.
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