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Senior Contributor
Noah_Bodie
Posts: 4,635
Registered: ‎03-11-2007

Three banks resilient to loan troubles - Wells Fargo in particular

 
SAN FRANCISCO (AP) - Wells Fargo & Co. (NYSE:GWF) (NYSE:JWF) (NYSE:WSF) (NYSE:WPF) (NYSE:WFC) raked in more service fees and milked customer deposits to boost its second-quarter profit by 9 percent, sticking to a familiar formula that paid off even as more households struggled to pay their bills.
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Wells Fargo, the nation's fifth largest bank, has been largely unscathed by the subprime implosion so far, even though it ranks among the sector's largest lenders.
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The bank benefited from a 23 percent increase in noninterest income, propelled by higher fees on deposit accounts, credit cards and other basic financial services.
 
Wells Fargo also fattened the spread between the average rate it paid to attract customer deposits and the average price it charged for loans. This gap, known as the net interest margin, stood at 4.89 percent in the second quarter, up from 4.76 percent a year ago.
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Without providing a specific breakdown, Wells Fargo said its subprime mortgages are held in a $22 billion portfolio of 'debt consolidation' loans. The bank said it lost just $10 million in this segment during the second quarter.
Wells Fargo management believes it is better positioned to avoid major subprime headaches because it demanded more paperwork to verify the incomes of borrowers and eschewed the kind of exotic loans that have devastated other lenders.
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Although it hasn't been hard hit yet, Wells Fargo is feeling some pain from the housing slump. The bank said more of its customers are missing payments on home equity loans, a trend that management expects to add to its loan losses in the rest of the year. The bank said its home equity headaches are concentrated in the Midwest and California's Central Valley.
 
The bank's second-quarter loan losses totaled $720 million, up 67 percent from $432 million at the same time last year.
New Contributor
cbjn1103
Posts: 144
Registered: ‎06-01-2007

Re: Three banks resilient to loan troubles - Wells Fargo in particular

Noah OP
Wells Fargo management believes it is better positioned to avoid major subprime headaches because it demanded more paperwork to verify the incomes of borrowers and eschewed the kind of exotic loans that have devastated other lenders.
 
I guess this kind of falls back on the crap that they pulled over on Flygirl and several others that said they got a message that their cc's were frozen until they send in their IRS tax forms for 2006.
 If they are having to much paperwork to deal with having to prove everyone's income, maybe they should stop harassing the small ones.
 
Makes me wonder where they come up with these figures....do they list their non-losses on other loans? They have to be making a substantial amount of profit in order to to cover those kind of losses or they wouldn't be one of the largest five lending banks in business.
Valued Member
bl00dymary
Posts: 35
Registered: ‎05-25-2007

Re: Three banks resilient to loan troubles - Wells Fargo in particular

I recently refinanced my homeloan just to get away from Wells Fargo.  When our mortgage was transferred to them, we had a 2 year history of paying ontime.  They were late (& it was Christmas time) in getting out the new payment info and with the holidays we fell behind on that first payment.. BUT we had the payment, and we would have had the second months before the grace period hit & been all caught up.  Well it turns out Wells Fargo does not believe in grace periods.  When we tried to pay it they said they our  $2000 was not good enough - now they wanted two months mortgage, and they would not accept our payment.  So we had no choice but to fall almost 2 months behind on our payments even when we had the payment.  We rolled this over for 6 months hoping to be able to catch up sooner or later- but this is scary.  So we refinanced with another bank.  Wells Fargo was also a huge pain in the ass when it came to spending our escrow money on the insurance & taxes it was supposed to be allotted for.  My sister handles the insurance and she said she has to call them all the time to find out if they are planning on paying the homeowners ins..  then they would refuse to give her information (whether or not they are planning on paying or just letting it lapse *eyeroll*) because she did not have permission to speak on behalf of the loanee!  She said no other bank does this and she deals with all of them for insurance purposes.  Also when I refinanced in JUNE I found out that they had not even paid my first ½ of the years taxes- so I had to add that $4000 into my closing costs and fight & wait for WF to refund the money that was in my escrow account.  Wells Fargo is a shark, their customer service is the worst, and they actually WANT you to go into forclosure.  If they haven't felt the pinch yet it is probably because they are lending subprime because they want to take these homes- and they not only lend to subprime but they make it as hard as they possibly can for people struggling to pay.  They practically forced us into forclosure.

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