Wells chief comments on mortgages sounds like a preview of another 2007
Wells Fargo hold a gun to the Governments head on poor quality mortgages. Somehow this article out of the blue took me straight back to 2007.
There still remains a fundamental gap in what Banks believe their role is, compared to what is expected from Government. The concept of government guaranteed mortgages helps many new homeowners but it is also a mis-used function that skews risk management. By definition it eliminates risk for banks. That seems perverse when compared to the concept of banking.
The wording of the Wells Chief struck me as something we ought to be concerned about. Do Wells have a portfolio of mortgages that they are concerned about again?
“If you guys want to stick with this programme of ‘putting back’ any time, any way, whatever, that’s fine, we’re just not going to make those loans and there’s going to be a whole bunch of Americans that are underserved in the mortgage market,” Mr Stumpf told the Financial Times.