Wells Fargo May Test Mortgage Servicing Rights Market
Wells Fargo & Co could look to sell mortgage servicing rights from time to time but isn't under any capital pressure to do so, Chief Financial Officer Tim Sloan said on Tuesday.
The fourth-largest U.S. bank is pleased that a market is developing for the buying and selling the collection rights for mortgage loans, Sloan said at an investor conference. A number of large banks have been selling these assets because of the treatment they receive under new international capital rules.
If interest rates rise, the value of mortgage service rights can go up, putting pressure on capital, Sloan said. Even if this occurs, Wells believes it will have adequate capital because it continues to build its cushion through earnings, he said.
Copyright 2013 by Reuters. All rights reserved.
Tweet This