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Subprime Lending

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Wells Posts Record Net Income In Spite of Subprime Drain 

Apr 17, 2007By

Wells Fargo & Company (NYSE:WFC), until recently widely regarded as the nation’s leading originator of subprime mortgage loans, reported record net income for the first quarter of $2.24 billion, up 11 percent from prior year’s $2.02 billion and up 12 percent from fourth quarter 2006. The company’s gain in earnings came despite $124 million in pre-tax write downs due to the company’s subprime mortgage exposure, including $90 million in adjusted carrying value for subprime loans on the bank’s books. Wells also said revenue was reduced by $34 million due to a decline in the value of its mortgage servicing rights.

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