Wells Fargo reports huge decline in new mortgage loans

NEW YORK (AP) – Wells Fargo’s income jumped 51 percent in the first quarter as more people opened accounts with the bank and business customers took out more loans. Higher interest rates, however, resulted in a sharp decline in new mortgages.

The amount of soured loans that Wells wrote off declined by $629 million from the previous quarter to $3.2 billion. Wells released $1 billion from its reserves for loan losses in the quarter as defaults declined, giving a boost to its bottom line.

A sharp rise in mortgage rates hurt Wells’ home loan business. Rates for 30-year mortgages jumped to 4.84 percent in March from 4.35 percent in September. New mortgage loans at Wells fell to $84 billion from $128 billion the previous quarter.

Applications for home mortgages, an indicator of future lending, fell sharply to $102 billion from $158 billion in the prior quarter. The amount of pending applications also fell to $45 billion at the end of the first quarter from $73 billion at the end of December.