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Those Pricey Houses May Not Mean Party Time for Banks

In the following video, Motley Fool analysts Matt Koppenheffer and David Hanson discuss how record-high new-home prices are only one part of the loan-origination equation.

JPMorgan Chase (NYSE: JPM  ) and Wells Fargo (NYSE: WFC  ) are the two largest mortgage originators. Existing home refinance activity has been slowing compared with 2012, and margins are also falling. Will these trends continue?

Matt and David consider how mortgage banking fees generated by the sale of conforming new home loans to Fannie Mae and Freddie Mac help to offset low mortgage interest rates and thin interest-rate spreads.

Wells Fargo's dedication to solid, conservative banking helped it vastly outperform its peers during the financial meltdown. Today, Wells is the same great bank as ever, but with its stock trading at a premium to the rest of the industry, is there still room to buy, or is it time to cash in your gains? To help figure out whether Wells Fargo is a buy today, I invite you to download our premium research report from one of The Motley Fool's top banking analysts. Click here now for instant access to this in-depth take on Wells Fargo.

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David Hanson

David has been with The Motley Fool since 2013. He is a graduate of the University of Miami. Follow David on Twitter for all things finance, marketing, and investing.

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3/31/2015 11:39 AM
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