Wells Fargo beat on its earnings, but missed ever so slightly on revenue for the first quarter of 2017

 

The bank reported earnings of $1.oo per share, higher than the $0.97 that analysts were expecting.
Additionally, the bank said it generated revenue of $22.0 billion, just below analysts' projections of $22.3 billion.
CFO John Shewsberry said in a press release accompanying earnings that the results were driven primarily by improved loan quality and a lower tax bill.
"Expenses were elevated compared with last quarter, driven by typically-higher first quarter personnel-related expenses," Shewsberry said. "Credit results improved, with lower net charge-offs and nonaccrual loans, and we benefited from lower income tax expense."
The bank said that consumer loans declined by $5.7 billion compared to the same quarter last year and commercial and industrial loans - essentially loans made to businesses - were down by $1.6 billion compared to the previous quarter, but were up $16.8 billion against the same quarter last year.
The bank also said there was a decline in outstanding credit for the month. This was partly due to seasonal effects, but also tightening credit standards in some areas.
"Period-end loan balances were $958.4 billion at March 31, 2017, down $9.2 billion from December 31, 2016, driven by a decline in credit card balances due to seasonality, a slowdown in new credit card account openings, and a continued decline in junior lien mortgage loans," said the bank's release. "In addition, there was an expected decline in auto loans from the fourth quarter as continued proactive steps to tighten underwriting standards resulted in lower origination volume."
The report follows a wild week for Wells Fargo.
On Tuesday, the board of directors released its investigation into the bank's fake accounts scandal. In September, it was revealed that Wells had settled with regulators after its employees in the retail banking segment had opened up as many as 2 million accounts for customers without their knowledge between 2011 and 2015. The scandal led to multiple congressional hearings and the resignation of former CEO John Stumpf.
The board determined that both Stumpf and former Community Banking head Carrie Tolstedt were responsible for not cracking down on the practice earlier, and the board said the scope of the practices most likely extended beyond 2011.
For his role in the fake accounts issue, the board clawed back another $28 million in compensation for Stumpf (in addition to the $41 million it had clawed back previously). Tolstedt was also retroactively fired and had $47.3 million clawed back.
Since the settlement with regulators was announced, the bank has seen a steep decline in new account openings. The bank said that new account openings declined by 35% in March from the same month last year, but were up 7% from February. Additionally, bank branch interactions were down from the year before.
New Wells CEO Tim Sloan tried to move forward from the scandal in the earnings press release, touting the release of the investigation as "valuable" to the bank.
"Wells Fargo continued to make meaningful progress in the first quarter in rebuilding trust with customers and other important stakeholders, while producing solid financial results," Sloan said. "We have taken significant actions throughout the company to date and we are committed to building a better bank as we move Wells Fargo forward."
Additionally, on Thursday, Warren Buffett's Berkshire Hathaway announced it was selling a total of 9 million shares of Wells Fargo to duck under regulatory hurdles from the Federal Reserve.
Any entity owning more than 10% of a large bank - as Berkshire did with Wells - is subject to additional regulation from the Fed. Berkshire decided that the extra scrutiny did not allow them to be the type of shareholders they wanted, so Buffett's firm announced it would reduce its holding in Wells to just below the 10% threshold.

Markets Insiders: 10 things you need to know today

Real-time market data. Get the latest on stocks, commodities, currencies, funds, rates, ETFs, and more from almost 100 global exchanges here.

Decorate Your Home With the Scents of the Season!

 

'Tis the season to cozy up to a gloriously-scented candle— Whether you prefer the smell of fresh pine, wafting mulling spices, or the essence of a roaring fire, there's a gorgeously fragranced flame here for every winter mood. Make the holidays extra scent-sational with any Holiday collection. Notes of pomegranate, mandarin, pine, cloves and cinnamon with a hint of vanilla and amber evocative of holidays spent fondly with family and friends.

One Sure Way Californians are Making Money in Real Estate

Are
you new to real estate investing? Learning how to invest in real estate
doesn't need to be complicated, difficult, or expensive. Learn how to get started investing in real
estate from beginning to end - with no hype, false promises, or pitches.



There are many different places you can stick your money other than
under your pillow, including stocks, bonds, savings, mutual funds, CD,
currencies, commodities, and of course, real estate. There are positive
and negative aspects of each investment option, but since we're here to
learn about real estate, we'll focus on that and that alone.

One of the most commonly stated reasons that people give for
investing in real estate is that they are seeking out financial freedom,
but there are others as well -- of course, each person will have their
own personal reasons why. They are typically seeking one or several of
the following: Learn more!

Deciding a 30- vs. 15-Year Mortgage

The right answer will depend on your circumstances, but some factors play a role in deciding which way to go. Today's record-low mortgage rates are giving
consumers the choice of two great options -- 30-year mortgages that
charge just over 4% interest or 15-year loans with rates nearly down to
3%.

The first thing to look at is the difference in monthly payments
between a 15-year mortgage and a 30-year loan of the same size. You want to look at what that 15-year payment will be and decide
if you can handle it. If you can't, that will decide it. Fifteen-year mortgages do charge lower interest rates than 30-year loans -- but carry higher monthly payments because you have to pay all principal back in half the time. 

For example, borrowing $300,000 for 15 years at 3.25%
average rate means you'll have a $2,108 monthly mortgage payment
(excluding the effect of any origination fees). That's nearly 50% higher than the $1,441 you'd pay if you take out the
same-sized loan for 30 years at 4.05% average rate (again,
ignoring origination fees).

 

You can check out your potential monthly payments by plugging in specifics from your own situation into the CHASE mortgage calculator. 

Many buyers would be well served if they opted for a 15-year
fixed-rate mortgage instead of a 30-year mortgage. A lower interest rate
and shorter term mean that you will pay considerably less for your
loan. And There’s not a single person who’s
paid off their house that has ever felt bad about it. Right? of course. The message is a
higher monthly payment, and it is sensible to weigh the value of a less
costly mortgage against other savings priorities like college,
retirement and a rainy day fund.

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How The Property Brothers Built Up A Real-Estate Empire

Think you know everything there is to know about the Property Brothers? Read on to find out if you're as much of an expert on Drew and Jonathan Scott as you thought.

The brothers bought their first house when they were only 17 years
old! In college, they didn’t waste any time before flipping a house for a
$50,000 profit.

They own Scott Brothers Entertainment with their older brother, JD.
When he’s not impressing home buyers with his amazing finds, Drew’s
passionate about directing and producing.

Because of their Scottish heritage, Drew and Jonathan were
competitive bagpipers as children. Jonathan claims to have taken home
all the medals.

We knew they were a hilarious duo on the Property Brothers,
but did you know that Drew and Jonathan Scott have their own sketch
comedy group? If you’re lucky, you might even see them doing stand-up.

They grew up on a ranch in Vancouver, Canada, and started riding horses by the time they were 3 years old.

Drew is in a relationship with Linda Phan, who is Scott Brothers
Entertainment's Creative Director. They recently attended a friend's
wedding...so are they next?

Jonathan fans, you're in luck! The rugged, flannel-shirt-outfitted
half of the Property Brothers duo is currently single. But, he is the
proud papa to two pint-sized dogs, Gracie and Stewie.

Big banks are leaving the building when it comes to the mortgage market

L.A. housing is expensive, sure. But are you paying too much for your rental? 

It would be reasonable to expect that the increases we’ve seen in
rents and purchase prices in recent years would be roughly proportional
throughout Los Angeles, but this is not the case. In actuality, purchase
prices can soar while rents remain stable, and vice versa—even within
the same neighborhood.

We used standard 28 percent "front-end" debt ratios and a 20 percent down payment subtracted from the NAR’s median-home-price data to arrive at our figures. We've incorporated available information on property taxes and homeowner’s insurance costs to more accurately reflect the income needed in a given market. Without a significant ramp-up in new home construction and more homeowners listing their homes for sale, buyers are likely to see little relief in the form of slowing price growth in the months ahead. 

The housing market is overheating and you can sense it when you speak to house humping enthusiast.  The housing market can do no wrong and a correction isn’t even in the realm of possibility according to their views.  But even recently, the National Association of Realtors recognized reality when they stated the obvious: rising home prices with no rise in household incomes is not good.  This is why in California we are facing rental hijacking.  People are now desperate to buy and are getting all kinds of odd mortgages including those that come with zero percent down basically shifting a large part of the risk to the lender.  These mortgages only make sense if you believe housing will never go down.  Many Millennials are still struggling to buy given their weak income growth.


Is the New American Dream to rent?  At least that is what it looks like if we track the home ownership rate over the last decade.  Millennials are moving into their prime house lusting age yet somehow, a flood of buying is simply not happening.  Renting continues to dominate the recent trend of household formation.  It was interesting to see that out of the top 10 metro areas for renters, 6 of them reside here in California.  There is a bit of hope, Poppy-loan is trying to capitalize on the low down payment crowd.  What has become clear is that California is now trending towards renter-heaven.