Wells Fargo & Company (NYSE:WFC), JPMorgan Chase & Co.(NYSE:JPM) Posted record quarterly Net Income

Results from the country's two largest mortgage lenders showed that some positive sentiments may be returning to the housing market, though it is still debatable whether the trend is long term.

Wells Fargo & Company (NYSE:WFC) and JPMorgan Chase & Co.(NYSE:JPM) on Friday put out figures that showed a surge in home loans and record profits.

Wells Fargo said it issued $139 billion in mortgages from July through September, compared with $89 billion in the same period last year.

JPMorgan wrote $47 billion in mortgages, compared with $37 billion last year.

JPMorgan reported a profit of $5.3 billion in the third quarter, up 36 percent from the same period a year ago.

It worked out to earnings of $1.40 per share, surpassing the $1.21 predicted by analysts.

Revenue rose 6 percent to $25.9 billion, beating expectations of $24.4 billion. Besides the higher mortgage revenue, earnings of the bank were also helped by lower provisioning for bad loans, lower expenses while it also got revenues from higher credit card use and investment banking fees.

Wells Fargo reported a profit of $4.7 billion in the third quarter, up 23 percent from the same period a year ago. That translated into earnings of 88 cents per share, a penny higher than estimates.

Overall revenue rose 8 percent to $21.2 billion, slightly lower than analysts expected.

Shares in JPMorgan fell about 1 percent, losing 48 cents to $41.62, while Wells Fargo's stock fell more than 2 percent, losing 93 cents to $34.25.

The CEOs of both institutions said that the mortgage market had turned the corner and there were improvements every quarter.

However a good portion of the mortgage lending was due to owners refinancing mortgages and not due to fresh homes being bought.

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Notable Stocks: Wells Fargo & Company (NYSE:WFC) & CVS Caremark Corporation (NYSE:CVS)

Wells Fargo 3Q earnings rise on growth of loan book

With increased mortgage lending and higher collection of fees, Wells Fargo & Company (NYSE:WFC) has posted record earnings in the third quarter. The bank issued more loans and also collected more interest on loans, compared to the same period last year. However, lower-than-expected revenue sent share prices tumbling 3 percent before opening bell.

The bank issued $139 billion of mortgage loans compared to only $89 billion in the third quarter last year. Net income for the quarter increased by 23 percent to $4.72 billion compared to last year’s $3.84 billion. Earnings per share were 88 cents against analyst expectations of 87 cents. Last year, the earnings had been 72 cents a share. Revenue for the period rose 8 percent to $21.21 billion. This was slightly lower than analysts’ estimates.

While net interest income rose by 1 percent, non-interest income which includes insurance and mortgage banking revenue and fees increased 16 percent.  

The stock fell 3 percent to $34.10.

On Tuesday, the federal government had filed a suit against Wells Fargo, accusing it of misleading regulators about the quality of several thousand loans for qualifying for federal loan insurance.

U.S. Government to investigate allegations against CVS Caremark

According to a Los Angeles Times report, the U.S. Government is looking into allegations that CVS Caremark Corporation(NYSE:CVS) refilled descriptions and submitted insurance claims to Medicare, the U.S. Health program for the elderly and disabled, without taking approval of the patients. An official who was not named said that the Inspector General for the U.S. Department of Health and Human Services had launched an investigation. This department is in charge of looking into potential Medicare fraud. Officials of the Department and CVS Caremark could not be reached.

An earlier probe which had continued for four years had ended in January when CVS Caremark had agreed to pay $5 million to settle charges made against it for incorrect pricing of drugs for the elderly and disabled.

Shares of CVS slid 1% to $47.13.

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