Wells Fargo vs. Bank of America: Advantage Wells

Comparing performance of Bank of America vs. Wells Fargo is interesting study, and is much more than an $8.8 billion loss compared to a $3.95 billion gain.

Bank of America “trimmed roughly 151,000 loans from its portfolio of delinquent and discontinued mortgages in the second quarter through foreclosure or short sales. However, there are still millions of these loans to go” through its Legacy Asset Servicing unit. According to Housing Wire, at the end of the second quarter, BofA reported more than 4.3 million loans in this portfolio, down 3.3% from the previous quarter. The amount of mortgages in 60-day delinquency or worse declined 5% to 1.2 million.”

More mortgage-related earnings came out with the release of U.S. Bancorp’s 2nd quarter numbers: a net income of $1.2 billion, up 57% from one year ago. Total revenue at the bank remained flat at roughly $4.6 billion. But it cut the provision for credit losses more than half, totaling $572 million in the second quarter, down from $1.1 billion one year ago and $755 million in the previous quarter. Mortgage banking revenue at U.S. Bank was also flat at $239 million, down slightly from $243 million one year ago but up from $199 million in the previous quarter. The bank wrote $8 billion in new mortgages, down from more than $10.5 billion in the same quarter last year and $12.1 billion in the first three months of 2011.

Many small lenders around the nation sell to Chase. In fact, it was the #3 lender in the first quarter with an 11% market share. So last week’s Bloomberg story caught many by surprise: “JPMorgan Chase & Co. (JPM) is winding down its $154 billion mortgage portfolio to “close to zero” as the bank works through mortgage losses and litigation over loan- servicing and foreclosure practices. JPMorgan, which has reduced mortgage holdings by $19.3 billion in the past year, will continue shedding assets by about as much as 15 percent a year “forever,” Chief Executive Officer Jamie Dimon told analysts on a conference call after the New York-based company reported a 13 percent increase in net income for the second quarter.” An educated guess suggests that this is Chase’s home equity business, although it is vague.