Pimco Says Wells Fargo Not to Blame for Record Mortgage Share
Wells Fargo & Co. (WFC), the largest U.S. home lender, has seen its market share surpassing records because of retreats by its rivals, not its own actions, according to Pacific Investment Management Co.’s Scott Simon.
“It’s not Wells Fargo’s fault they got so big,” Simon, the mortgage-debt head at Newport Beach, California-based Pimco, which runs the world’s largest bond fund, said today at a Mortgage Bankers Association conference in New York.
Wells Fargo made 33.9 percent of the $385 billion of mortgages originated in the first quarter, up from 30.1 percent in the preceding three months, according to industry newsletter Inside Mortgage Finance. That’s more than triple the share of the closest competitor, JPMorgan Chase & Co., with 10.6 percent.
Lenders including Bank of America Corp., the former market leader whose share fell to 4.2 percent, have scaled back after losses and lawsuits sparked by faulty home lending and servicing, as well as so-called Basel III regulations that are set to require banks to hold more capital when owning relatively large amounts of servicing contracts.
“If Wells Fargo went back to 20 percent, tried to cut themselves back more, it’d be hugely restrictive on credit,” Simon said.