Wells Fargo & Co. (WFC): All’s Well, But There’s Still A Far Way To Go

Denver, CO, 07/15/2013 (Avauncer.com) – On Friday, Timothy Sloan, the Wells Fargo & Co. (WFC) Chief Financial Officer told investors that the company’s pipeline is still pretty string despite the fact that there have been a drop in mortgage applications. There was a significant rise in mortgage rates in the Q2 and this was a definite deterrent for homeowners from refinancing mortgages. Sloan said that despite this, WFC has quite a substantial unclosed mortgage pipeline towards the fag end of the quarter. Borrowers are still applying to purchase homes and that factor still has some muscle. It’s refinancing of the current mortgages that are expected to drop.

Volatility on the rise

Sloan also said that there is no certainty about which way mortgage origination is going to trend but the general indication is that that it is going to be largely lower in the current quarter. The mortgage business is an extremely volatile one and it’s not really a good thing to think either six or nine months out. With the country’s biggest banks kicking off their Q2-earnings reporting season on Friday, investors as well as bank customers are now scouring for some insight into what impact the rising interest rates will have on the mortgages and housing. This kind of business lending is very critical to WFC’s business and economic expansion.

Market leaders

Wells Fargo & Co (NYSE:WFC) and JPMorgan Chase led off with their reports just before the stock market opened up. The projection is that the country’s biggest bank, JPMorgan, is expected to earn $1.44/share which is 18% up from 2012. Wells Fargo is the fourth-largest bank in the United States. To a large degree the performance of these two biggies is largely indicative of the way the banking market will run. And so when it says that there was a 3.4% growth in its loan portfolio, it seems like there is some hope after all and that things are finally on the mend. Housing and financial businesses have taken a very bad beating since 2009 and this is a definite breather.