Wells Fargo released their third quarter earnings statement showing a 22% increase for the quarter. Wells Fargo has the largest worth of any U.S. Bank and is the nation’s largest financial institution when it comes to mortgages.
Driving this strong financial quarter for Wells Fargo is the recent reduction in interest rates which attracted borrowers to Wells Fargo to refinance loans and home mortgages. Specifics of the record setting revenue generating quarter reflects a strong income stream from home loans as Wells Fargo was involved in one out of every three home loans that were transacted. This number is a reflection of loans conducted in America for the first half of the year.
Additionally, 25% of all of the fees collected by Wells Fargo resulted from originations and servicing connected with home loans. Statistics reflect that origination fees, nationally, climbed to an increased level of 33% for the third quarter. The level of net revenue, nationally, rose to $412 billion. These facts and figures are verified through the Mortgage Bankers Association of Washington.
Currently a 30 year mortgage can be obtained for a qualified borrower at a rate of 3.38%.
These earnings exceeded the expectations of most analysts. Those expectations of analysts forecasted the increase of Wells Fargo stock to rise in value to a level of $.87 additionally per share.
Reflected in this strong earnings statement for the third quarter was a record $4.94 billion for the year or an increased value of $.88 per share of stock. This figure is in comparison to earnings of $4.06 billion or $.72 a share realized year to date in comparison to last year.
Recently, a lawsuit was filed by the U.S. Government. This lawsuit claimed that Wells Fargo was involved in mortgage loans that ended in default. These claimed irresponsible mortgage loans subsequently caused significant losses to the federal insurance program. The lawsuit claims that these irresponsible loans were provided over a period of 10 years. Wells Fargo does not admit to any wrongdoing and has indicated their commitment to defend itself against this lawsuit.
At the close of trading, Wells Fargo was trading at a level of $35.18 per share. This level of value per share of stock reflects a 28% increase and brings the value of Wells Fargo to a level of $186 billion.
The largest shareholder of Wells Fargo stock is Berkshire Hathaway, Inc. at a level of 7% of common share stock owned. Wells Fargo is headquartered in San Francisco, California.
Adding to the bottom line of all banking institutions are streams of revenue associated with mortgages processed through less than desirable home loan institutions. As a result of costs associated with these less than desirable loans, an estimated $84 billion has been realized in revenue by banks.