Is Wells Fargo different from Lehman, Bear Sterns, and others who’ve gone under? Do they resell mortgages?
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Does Wells Fargo sell the mortgages they underwrite? Do they trade in mortgage-backed securities? The appear to stay afloat for now. Would like to know what they are doing right. Thanks!
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Its common practice for banks to resell mortgages. Pretty much all banks do them. The crisis that we have been experiencing was not because banks were reselling mortgages, but because they were lending out risky loans. They then would bundle up these risky loans or sub prime loans and sell them to investors. Also these risky mortgages were not backed by Freddie Mac and Fannie Mae.
To answer your question I am not sure if they participated in selling sub prime mortgages, but I believe if they were substantially involved then we would have heard about it.
I don’t know all the answers you want, but I have had two mortgages sold to Wells Fargo, and they maintained them, they were not resold.