Wells Fargo CFO: We Will Get Most Of The Mortgage Refinancing Business When Rates Move Down

Wells Fargo & Co WFC reported its second-quarter earnings earlier on Tuesday, which came in-line with analysts' expectations.

John Shrewsberry, Wells Fargo CFO, was on CNBC recently to weigh in on the numbers and to discuss the drop in mortgage applications for the bank in the second-quarter.

Very Strong Quarter In Mortgages

"We see growth in most of our businesses that are generating loans on the one hand, so that's a good sign, both consumers and commercial," Shrewsberry began. "It has contributed to us having the highest loan total that we have ever had at $888 billion. And then...mortgage is at the top, it was very strong quarter in mortgages."

He continued, "Stronger in the first-quarter because of the great value that we had there, but strong in the second-quarter as a result of that being the purchase season. So, when you put it all together. In this choppy GDP growth environment and then in a low rate environment we generated $21.3 billion of revenue and had profit that's $5.7 billion worth of profit, which is at a very high level for us."

Drop In Mortgage Applications

Shrewsberry was asked about the mortgage applications at Wells Fargo dropping 13 percent in the second-quarter from first-quarter compared to 10.1 percent drop in application for the mortgage industry overall. He replied, "I'd expect the reduction in applications, you recall we had a big rate rally in the first-quarter. We are the largest servicer of mortgages. So, people tend to come in and refinance when rates move down, we will get most of that business compared to the rest of the market because we are the biggest servicer."