" GREAT DEPRESSION REVISITED
Wells Fargo said it would put its riskiest $11.9 billion of home equity loans into a "special liquidating portfolio." It expects losses in this portfolio will total $1 billion over 2008 and 2009, and decline over time as loans are repaid.
The $11.9 billion represents about 14 percent of the $83.4 billion of home equity loans in Wells Fargo's portfolio, and about 3 percent of total loans outstanding as of September 30. Wells Fargo said it expects the $1.4 billion charge to "adequately cover all losses inherent in its portfolios."
Analysts, on average, expected the bank to earn 68 cents per share in the fourth quarter, according to Reuters Estimates. The charge equals roughly two-fifths of Wells Fargo's pre-tax profit in the third quarter, when net credit losses rose 35 percent to $892 million.
Wells Fargo announced the write-down after Chief Executive John Stumpf projected in a November 15 presentation "elevated" home equity loan losses into 2008.
Lamenting that "we have not seen a nationwide decline in housing like this since the Great Depression," he said: "I don't think we're in the ninth inning of unwinding this. If we are, it's an extra-inning game."
Citigroup Inc (C.N), Bank of America Corp (BAC.N) and Wachovia Corp (WB.N) are among the many other banks to announce mortgage-related write-downs of $1 billion or more this month."
http://news.yahoo.com/s/nm/20071128/bs_nm/wellsfargo_charge_dc;_ylt=A0WT...
