Wells Fargo Aggressively Writing New Loans

Wells Fargo was one of the many banks that were writing mortgage aggressively in 2007, which included Bank of America, JPMorgan Chase and CitiBank.  Many experts believe that lax underwriting standards with these banks were a big part of the mortgage implosion.  Finally we are seeing some of the lending begin to loosen with the largest lenders in 2012.  The federal initiative Dodd-Frank Bill is expected to be finalized in June, which will write down exact lender standards for all lenders to follow when issuing mortgages.

While Bank of America, JPMorgan Chase and Citibank have not gotten back into the market of buying secondary loans, Wells Fargo seems to be gobbling up the market.  According to HousingWire, the $1.3 Trillion lender has been going on a buying spree and is writing new residential and commercial loans in large numbers.  Wells Fargo represents over 25% of the residential loan underwriting market according to experts at HousingWire.  It has been difficult to explain Wells Fargo’s aggressive stance on mortgage underwriting other than the inherent gamble that the housing market is on the way back.  Wells Fargo is banking their lending position on their mortgage portfolio alone, betting on increasing values and lease rates combined with a pent-up demand.  If they are right, Wells Fargo is in position to do a lot of business.  Most cities are reporting that a majority of the residential underwriting is being done by Wells Fargo in the market occupied by smaller lenders and banks.