Wednesday, July 16, 2008

Wells Fargo Taking Over the Western Mortgage Market

And it is starting to show in their last earnings report.

Ladenburg Thalman analyst Richard X. Bove said that he was impressed by Wells Fargo’s earnings despite coming in well below results in the past year. Bove added that Wells Fargo benefited from less competition as rival Washington Mutual is shrinking, Countrywide Financial (nyse: CFC - news - people ) and Golden West (nyse: GDW - news - people ) are gone and Bank of America (nyse: BAC - news - people ) is not competing as hard for mortgage business. He also likened Wells to "a 'hot knife' in the 'butter' known as the West Coast," as community bankers across the region are suffering. "The gains are likely to continue," he noted.

It seems like the last man standing is going to get a pretty large slice of the West Coast market. Also Wells Fargo seems to be pretty tight on the underwriting so the loans they are putting on the balance sheet won't damage the company going forward. Also it seems that Warren Buffet is long this stock and adding to his position. I could be a good place to start your research if you are nibbling fincancials again.

No comments: