{"page":"\u003clink rel=\"stylesheet\" href=\"https://lessonplanet.com/assets/packs/css/resources-c03aa079.css\" /\u003e\n\u003clink rel=\"stylesheet\" href=\"https://lessonplanet.com/assets/packs/css/lp_boclips_stylesheets-517835be.css\" media=\"all\" /\u003e\n\u003cdiv data-title='Bank to absorb US$1.4 billion in losses on home loans' data-url='/boclips/videos/5c54c253d8eafeecae158e2e' data-video-url='/boclips/videos/5c54c253d8eafeecae158e2e' id='bo_player_modal'\u003e\n\u003cdiv class='boclips-resource-page modal-dialog panel-container'\u003e\n\u003cdiv class='react-notifications-root'\u003e\u003c/div\u003e\n\u003cdiv class='rp-header'\u003e\n\u003cdiv class='rp-type'\u003e\n\u003ci aria-hidden='true' class='fai fa-regular fa-circle-play'\u003e\u003c/i\u003e\nVideo\n\u003c/div\u003e\n\u003ch1 class='rp-title' id='video-title'\u003e\nBank to absorb US$1.4 billion in losses on home loans\n\u003c/h1\u003e\n\u003cdiv class='rp-actions'\u003e\n\u003cdiv class='mr-1'\u003e\n\u003ca class=\"btn btn-success\" data-posthog-event=\"Signup: LP Signup Activity\" data-posthog-location=\"body_link_boclips\" data-remote=\"true\" href=\"/subscription/new\"\u003e\u003cspan\u003e\u003cspan\u003eGet Free Access\u003c/span\u003e\u003cspan class=\"\"\u003e for 10 Days\u003c/span\u003e\u003cspan\u003e!\u003c/span\u003e\u003c/span\u003e\u003c/a\u003e\n\u003c/div\u003e\n\u003c/div\u003e\n\u003c/div\u003e\n\u003cdiv class='rp-body'\u003e\n\u003cdiv class='rp-info'\u003e\n\u003cdiv aria-label='Hide resource details' class='rp-hide-info' role='button' tabindex='0'\u003e\u0026times;\u003c/div\u003e\n\u003ci aria-label='Expand resource details' class='rp-expand-info fai fa-solid fa-up-right-and-down-left-from-center' role='button' tabindex='0'\u003e\u003c/i\u003e\n\u003ci aria-label='Compress resource details' class='rp-compress-info fai fa-solid fa-down-left-and-up-right-to-center' role='button' tabindex='0'\u003e\u003c/i\u003e\n\u003cdiv class='rp-rating'\u003e\n\u003cspan class='resource-pool'\u003e\n\u003cspan class='pool-label'\u003ePublisher:\u003c/span\u003e\n\u003cspan class='pool-name'\u003e\n\u003cspan class='text'\u003e\u003ca data-publisher-id=\"30356011\" href=\"/search?publisher_ids%5B%5D=30356011\"\u003eCurated Video\u003c/a\u003e\u003c/span\u003e\n\u003c/span\u003e\n\u003c/span\u003e\n\u003c/div\u003e\n\u003cdiv class='rp-description'\u003e\n\u003cspan class='short-description'\u003eNew York City - 28 November 20071. Mid shot of people walking outside building, zoom out and tilt up of building exterior2. Push in to Wells Fargo sign 3. Pan of Wells Fargo sign 4. SOUNDBITE: (English) Frank Braden, Standard and Poor's...\u003c/span\u003e\n\u003cspan class='full-description hide'\u003eNew York City - 28 November 2007\u003cbr/\u003e1. Mid shot of people walking outside building, zoom out and tilt up of building exterior\u003cbr/\u003e2. Push in to Wells Fargo sign \u003cbr/\u003e3. Pan of Wells Fargo sign \u003cbr/\u003e4. SOUNDBITE: (English) Frank Braden, Standard and Poor's equity analyst:\u003cbr/\u003e\"Well I think that Wells Fargo typically has been a fairly conservative company and I think this move somewhat reflects that. The large write down really is for the pressure that they see coming for the quarters coming ahead. So they're taking a large charge now and will write off any additional charges against that in the following quarters. So as long as there is no further deterioration in their portfolio it could be possibly good for the earnings per share for the company.\"\u003cbr/\u003e5. Zoom out of Wells Fargo sign \u003cbr/\u003e6. Wells Fargo sign\u003cbr/\u003e7. SOUNDBITE: (English) Frank Braden, Standard and Poor's equity analyst:\u003cbr/\u003e\"Well, one of the largest issues with Wells Fargo is their exposure to the California mortgage market. Their large presence in California is a large risk for Wells Fargo and just because they are writing down a large portion at this point in time doesn't mean you won't see a continued deterioration in that portfolio and could see further writedowns going forward.\"\u003cbr/\u003e8. Pan down of building; zoom into entrance\u003cbr/\u003eFILE: Date and location unknown\u003cbr/\u003e9. Various shots of homes and realtor signs\u003cbr/\u003eWells Fargo, the fifth-largest US bank, is absorbing 1.4 (b) billion US dollars in losses on home equity loans that borrowers have stopped repaying amid a deepening real estate slump that has turned into a financial sinkhole.\u003cbr/\u003eUntil Wells Fargo disclosed its projected losses late on Tuesday, the San Francisco-based bank had suffered relatively little damage in a mortgage meltdown that had already battered other major US lenders.\u003cbr/\u003eAfter gaining 34 cents to finish at 29.83 US dollars in Tuesday's regular session, Wells Fargo shares plunged 1.40 US dollar, or 4.7 percent, in the extended trading that followed a Securities and Exchange Commission filing outlining the bank's home equity loan losses.\u003cbr/\u003eLike several of its peers, Wells Fargo will take its lumps in the fourth quarter by recognising 1.4 (b) billion US dollars in pre-tax losses, with most of the trouble concentrated in a bundle of high-risk home equity loans that the bank intends to purge from its books.\u003cbr/\u003eThe bank is retroactively registering 265 (m) million US dollars in expenses tied to its share of the costs for a 2.25 (b) billion US dollars settlement that credit and debit card network Visa Inc. reached with American Express Co. earlier this month. \u003cbr/\u003eWells Fargo owns a 5 percent stake in Visa.\u003cbr/\u003eThe legal expenses will trim Wells Fargo's previously reported earnings for the second quarter of 2006 by 2 cents per share and lop off 4 cents per share from its earnings for its most recent quarter ended in September.\u003cbr/\u003eWell Fargo's troubled home equity loans, totalling 11.9 (b) billion US dollars, represent about 14 percent of the bank's total home equity portfolio of 83.4 (b) billion US dollars.\u003cbr/\u003eThe bank said most of the delinquent loans originated from mortgage brokers or other lenders on the wholesale market and were concentrated in areas experiencing the sharpest declines in home values.\u003cbr/\u003eFrank Braden, a Standard and Poor's equity analyst, said Well Fargo's exposure to the west coast mortgage industry may cause problems for the company. \u003cbr/\u003e\"Their large presence in California is a large risk for Wells Fargo and just because they are writing down a large portion at this point in time doesn't mean you won't see a continued deterioration in that portfolio and could see further writedowns going forward,\" said Braden.\u003cbr/\u003eAlthough Wells Fargo did not pinpoint the troubled markets in Tuesday's SEC filing, management has previously said the bank was experiencing its biggest headaches in California's Central Valley and \"auto-belt\" states in the Midwest.\u003cbr/\u003eWells Fargo was now steering clear of virtually all home equity loans made outside its own offices.\u003cbr/\u003eThe cautious approach was a stark change from a few years ago when Wells Fargo and other banks sought to cash in on rapidly rising real estate prices by offering teaser rates on mortgages and lowering the bar to qualify for a loan.\u003cbr/\u003eAlthough Wells Fargo has maintained that it imposed higher standards than most other lenders, the bank still got dragged down into the mortgage morass as the sharp decline in real estate prices left borrowers owing more money than their property was worth.\u003cbr/\u003eThe bleak market conditions has prompted more borrowers to default on their home equity loans, exposing Wells Fargo to hefty losses.\u003cbr/\u003eThe first hint of Wells Fargo home equity trouble surfaced last month when the bank reported it lost 153 (m) million US dollars on the portfolio in the third quarter, from 27 (m) million US dollars at the same last year.\u003cbr/\u003eWells Fargo's chief executive, John Stumpf, spooked investors even further two weeks ago when he described the current real estate slump as the worst since the Great Depression of the 1930s and reiterated earlier projections that the bank's home equity losses would continue to rise next year.\u003cbr/\u003e\u003c/span\u003e\n\u003c/div\u003e\n\u003cdiv class='action-container flex justify-between'\u003e\n\u003cbutton aria-expanded='false' aria-label='Read more description' class='rp-full-description' type='button'\u003e\n\u003ci class='fai fa-solid fa-align-left'\u003e\u003c/i\u003e\n\u003cspan id='read_more'\u003eRead More\u003c/span\u003e\n\u003c/button\u003e\n\u003cdiv class='rp-report'\u003e\n\u003c/div\u003e\n\u003c/div\u003e\n\u003cdiv aria-labelledby='resource-details-heading' class='rp-info-section'\u003e\n\u003ch2 class='title' id='resource-details-heading'\u003eResource Details\u003c/h2\u003e\n\u003cdiv class='rp-resource-details clearfix'\u003e\n\u003cdiv class='detail'\u003e\n\u003cdl\u003e\n\u003cdt\u003eCurator Rating\u003c/dt\u003e\n\u003cdd\u003e\u003cspan class=\"star-rating\" aria-label=\"3.5 out of 5 stars\" role=\"img\"\u003e\u003ci class=\"fa-solid fa-star text-action\" 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