Mortgages

Wells Fargo missed analysts’ earnings estimates as home lending slowed and the bank set aside more than expected for potentially soured loans as the Federal Reserve’s rate hikes started to cool the once-hot housing market.

The San Francisco bank reported a 31% increase in loan originations during the second quarter. Analysts are wondering whether it will be able to secure enough low-cost funds to avoid eroding margins.

Several groups raised concerns at a public hearing about the Canadian bank’s proposed acquisition of Bank of the West. They accused BMO of shortcomings in its mortgage lending to Black and Latino borrowers and said they won’t support the deal without the bank's firm commitment to help underserved communities.

Led by Rep. French Hill, the group of conservative lawmakers said the agency must do more to ensure appropriate transparency regarding any new products or activities that the enterprises undertake.

Former Federal Reserve Gov. Daniel Tarullo and two Fed economists argue that the Federal Home Loan banks have expanded into activities that pose risks to financial stability.

The 30-year average has made a steep reversal over the past two weeks following a large acceleration in mid-June.

The bank began trimming its payroll after a dismal first-quarter origination performance. It will announce second-quarter results next week.

Even with another annual surge of over 20%, the pace of home-price growth eased in May and experts anticipate even further moderation over the next year.

The use of rent data in credit models is allowing people with low credit scores or thin credit files to get loans. But consumer advocates warn the use of that data could harm the very people it’s supposed to help. 

The top five had a combined portfolio of nearly half a billion dollars.