Wells Fargo & Co hired 2,000 full time employees in the second quarter to keep up with its growing pipeline of mortgage applications.
“We have ramped up our team members to be able to move the pipeline through as quickly as we can,” said Wells Fargo chief financial officer Tim Sloan during an investor conference call Friday.
The nation’s largest lender had loan applications totaling $102 billion in its pipeline at the end of the second quarter, the second highest in the company’s history.
During the call one analyst suggested that Wells Fargo could originate $170 billion of single-family loans in the third quarter based on its conversion rate of applications-to-closed loans.
“We hope $170 billion is the right number,” Sloan said. “But it could be a little different,” he added. Wells Fargo originated $131 billion in loans during the second quarter.
(This week the bank made the decision to kill its wholesale channel which accounts for 5% of its total fundings, but 14% of all table fundings in the industry, according to figures compiled by National Mortgage News.)
The CFO also noted the bank increased its provisions for mortgage repurchases by $669 million due to “communications” with Fannie Mae and Freddie Mac late in the second quarter.
Sloan said the GSEs are adjusting their behavior and he couldn’t rule out the need for additional provisioning for loan buybacks. “We are going to push back,” said Wells Fargo chairman and chief executive John Stumpf.
“There is a whole team that takes his very seriously” he added. “And we have been successful in the past.”