The latest victim of the current mortgage meltdown in America is Wells Fargo (NYSE: WFC). The bank announced late last night it is was going to be losing about $1.4 billion during its fourth quarter resulting from home loans that are not getting repaid.Despite last night's announcement, the stock is actually trading higher in today's premarket, up 0.6% (last night, traders had initially pushed the stock down about 5%). The main reason why the stock is holding up so well is the impression on Wall Street that Wells Fargo still remains in much better shape than its peers.
Luckily for Wells Fargo, the company had the foresight to sell off the majority of the $2 trillion in loans it made starting back in 2001, so it was able to avoid falling too deeply into the mortgage fiasco that has been claiming bank after bank this year.
According to the Howard I. Atkins, chief financial officer, "the bank had largely avoided many of the credit and capital market problem areas in the industry." So far Wall Street seems to agree.
Wells Fargo will continue to supply home loans to customers, but it will only supply these loans directly to the customer, and will no longer acquire home equity loans through indirect channels.
Looking forward, the bank stated that it also plans to write off around $1 billion in 2008 and 2009.
Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.
Closing Bell: Can't go up every day (BAC, HE, HPW, COMS, BRCD, WMT, AMD)
Wal-Mart grows profit and cash flow in Q3, but comps still ailing
Chasing Value: Ten stocks for 2010 -- Part 2
Reader Comments (Page 1 of 1)
11-28-2007 @ 7:38PM
Bob said...
The NewsVisual story on Wells Fargo makes clear that larger financial institutions can make prudent lending decisions, at least according to the banks CFO.
12-13-2007 @ 3:11PM
Barbara Ann Jackson said...
re: Foreclosure Fraud, Wall Street, FREDDIE MAC, Wells Fargo, Judicial Corruption
Any representation to Wall Street Investors by FREDDIE MAC that FREDDIE’S reported $$$ billion dollar losses are due to people defaulting on their mortgages must be weighed against the fact that (in states such as Louisiana), Wells Fargo and Freddie Mac is paying DEBT COLLECTION firms needless, outrageous litigation costs for corporate lawyers to outmaneuver –and even persecute people who file court proceedings in opposition to fraudulent foreclosures. In Louisiana, Wells Fargo and FREDDIE MAC are 2 mortgage companies which benefit from fraudulent foreclosures, and entrenched real estate and mortgage fraud racketeering schemes. But thanks to federal authorities such as U.S. Attorney Jim Letten and U.S. Attorney David Dugas, real estate racketeers in Louisiana have nothing to worry about. Verification of what I have written is posted on my www.lawgrace.org website.
http://www.lawgrace.org/2007/12/08/my-december-7-2007-comment-posted-to-the-times-picayune-blog-about-the-news-article-entitled-%e2%80%9cjudge-gets-debt-reprieve-badeaux-has-skipped-mortgage-payments%e2%80%9d-the-foreclosure-of-this-lo/
===================================================================
*Also, posted on NEWSBLAZE.COM, see this article: "Mortgage Mess, Foreclosure Fraud and Impediments to Justice:"
Most critical to the Foreclosure Crisis is FORECLOSURE FRAUD, which enables MORTGAGE LENDERS to ILLEGALLY FLIP properties. In Louisiana, 2 particular mortgage companies which benefit from fraudulent foreclosures are Wells Fargo and FREDDIE MAC! It is HIGHLY COMMON for a DEBT COLLECTOR attorney to file a foreclosure: (i) in the name of a DEFUNCT mortgage company;(ii) in the name of a mortgage company which is NO LONGER holder of the security interest (the promissory note); or (iii) file a foreclosure and AFFIX a "ransom" amount (the collector's fee) far exceeding what the promissory note "Acceleration Clause" authorizes.
Despite a property owner's entitlement to Challenge CONTRARY-TO-LAW loss of his / her home, most property owners LACK consumer and legal knowledge; the Court System is REFRACTORY; and there are limited attorneys with acumen to pursue Consumer Law. Also, when borrowers sue for "Unfair Debt Collection Practices," damages, the collector gets to make more $$ through prolonged litigation, as co-conspirators enjoy the foreclosure pie.
Investors need to become more astute about how mortgage servicers' misdeeds hurts borrowers as well as siphons incalculable amounts of money from what Investors should reap. (See "Limiting Abuse and Opportunism By Mortgage Servicers," AND "Private Property Rights Deferred: Has Predatory Mortgage Servicing Destroyed The American Dream" by Rawle Andrews, Jr., Esq.,and Leroy Jones, Jr., J.D. Visit: http://www.msfraud.org/index.html.)
http://newsblaze.com/story/20071203130614tsop.nb/newsblaze/TOPSTORY/Top-Stories.
====================================================================
Barbara Ann Jackson
Law & Grace, Inc.
www.lawgrace.org
LOUISIANA