Wells Fargo Foreclosures for Sale in CA Down, Profits Up

by Peter Vernon on Foreclosures, Wells Fargo Foreclosures

As Wells Fargo foreclosures for sale dropped in number and weakened their impact on bank finances, Wells Fargo posted an increase in profits by 12 percent in the April to June quarter.

Improvements in payments for other consumer debts like credit card debts and auto loans also contributed substantially to revenues as losses from loans were controlled. Unlike the three other large U.S. banks which have huge investment banking units, Wells Fargo relies more on consumer credit for its revenues, so when its consumer banking activities improved, such as consumer lending and deposits, its profits also improved.

In the second quarter, Wells Fargo reduced its provisions for bank foreclosed homes and other nonperforming assets to $3.99 billion, down by 22 percent from $5.09 billion one year earlier. It also reduced its losses in mortgage loans, home equity loans, auto loans, credit card debts and other consumer loans. Its charge-offs for the second quarter fell by almost 16 percent to $4.49 billion from $5.33 billion in the previous quarter.

The overall number of Wells Fargo foreclosures for sale nationwide has been reduced over the past months, as the bank stepped up its loan adjustment activities under the Home Affordable Modification Program. It has increased its conversion rate to 27 percent, putting nearly 44,700 trial modifications into permanent status, up substantially from 40,759 in the previous month. Although these figures are small compared to hundreds of thousands of homeowners in distress, each number represented a home saved from a list of bank owned foreclosures.

Since the launching of the federal loan modification program last year and the Home Affordable Foreclosure Alternatives scheme early this year, a higher number of foreclosures in California were prevented, compared to other states. Based on a report from a foreclosure research company, a total of 10,506 foreclosure filings in the state were cancelled in June, marking an improvement of 27 percent from the previous month and a whopping increase of 153 percent from one year earlier. These cancellations helped cut down the inventory of Wells Fargo foreclosures for sale in the state.