Company: WFC-PC
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000072971-25-000253
Chunk: 77

Company: WELLS FARGO & COMPANY/MN
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 1
Chunk 77
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 the third quarter and first nine months of 2025, respectively, and $1.1 billion and $2.8 billion during the third quarter and first nine months of 2024, respectively.In the normal course of business, we purchase certain non-agency securities at initial securitization or subsequently in the secondary market, which we hold for investment. We may also provide seller financing in the form of loans. We received cash flows of $100 million and $110 million during the third quarter and first nine months of 2025, respectively, and $82 million and $274 million during the third quarter and first nine months of 2024, respectively, for VIEs with continuing involvement, related to principal and interest payments on these securities and loans. These amounts exclude cash flows related to trading activities.Table 13.2 presents the key weighted-average assumptions we used to initially measure residential MSRs recognized during the periods presented.Table 13.2:  Residential MSRs – Assumptions at Securitization Date20252024Quarter ended September 30,Prepayment rate (1)16.1%19.9 Discount rate9.8 9.9 Cost to service ($ per loan) $65 69 Nine months ended September 30,Prepayment rate (1)15.3%18.1 Discount rate10.1 10.1 Cost to service ($ per loan)$63 180 (1)Includes a blend of prepayment speeds and expected defaults. Prepayment speeds are influenced by mortgage interest rates as well as our estimation of drivers of borrower behavior.See Note 12 (Fair Value Measurements) and Note 6 (Mortgage Banking Activities) for additional information on key assumptions for residential MSRs.RESECURITIZATION ACTIVITIES.  We enter into resecuritization transactions as part of our trading activities to accommodate the investment and risk management activities of our customers. In resecuritization transactions, we transfer trading debt securities to VIEs in exchange for new beneficial interests that are sold to third parties at or shortly after securitization settlement. This activity is performed for customers seeking a specific return or risk profile. Substantially all of our transactions involve the resecuritization of conforming mortgage-backed securities issued by the GSEs or guaranteed by GNMA. We do not consolidate the resecuritization VIEs as we share in the decision-making power with third parties and do not hold significant