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Sage Home Loans has agreed to pay consumers impacted by a data breach last December.The lender will provide $925,000 for customers who it had personal identifiable information on at the time of the incident, according to a court filing by plaintiffs last week. The proposed settlement in the class action complaint is pending approval by a South Carolina federal judge.The class spans 135,000 consumers. The company notified 28,018 customers and 986 current and former employees that their PII may have been compromised. "The settlement will provide the settlement class members with substantial relief — that precisely addresses the harms inflicted by the data incident — without the risk of delay from protracted litigation," wrote attorneys for plaintiffs in an Oct. 11 unopposed motion for preliminary settlement approval. Neither the mortgage lender nor attorneys for both parties responded to immediate requests for comment Tuesday morning. The agreement is a relatively swift ending to the litigation commonly filed by data breach victims following a disclosed incident. Some mortgage players, like Loandepot, moved quickly to settle claims following cyber attacks, while others, including servicers entangled in a massive hack, are fighting protracted lawsuits. Three former mortgage customers led the February complaint against Sage, accusing it of negligence and failing to use reasonable security procedures in suffering the cybersecurity incident last year. Plaintiffs claim unidentified assailants acquired files the lender shared with a third party containing unencrypted PII. Sage has revealed few details about the incident, stating it discovered suspicious activity on a Lenox legacy network. The company was formerly known as Lenox Financial Mortgage Corp., also doing business as Weslend Financial, before changing its name to Sage last November. The pending agreement fund will provide up to $1,500 per class member for losses "fairly traceable" to the hack, according to last week's filing. Sage will comp members up to $125 for time they spent remedying issues related to the breach, or an alternative cash payment of $50. Attorneys for the class will also file an application for fees up to 33.33% of the settlement fund. The three class representatives are also in line to receive $5,000 awards. The data breach-related payments will be subject to proportional increase if clams don't exhaust the entire fund, and can conversely decrease if claims exhaust the fund. There's no evidence to suggest the near-million dollar payout will put Sage in danger of insolvency, plaintiffs wrote. As part of the agreement, Sage will also provide to the class action attorneys a "security attestation" describing security measures the lender will implement as part of the deal. Plaintiffs requested numerous cybersecurity protocols the company should introduce, such as penetration testing and third party security assessments for 10 years. It's unclear which measures Sage already has, or plans to implement.

At first glance, assumable mortgages sound like an awesome solution to a problem home buyers have been facing lately.With mortgage rates now closer to 6.5% instead of 3%, housing affordability has suffered greatly. It’s now at its worst levels in decades.Coupled with ever-rising home prices, many would-be buyers have essentially been locked out of the housing market.But with an assumable loan, you can take on the seller’s mortgage, which these days is often super low, sometimes even sub-3%.While that all sounds good and well, there’s a pretty sizable (literal) problem: the down payment.Wait, How Much Is the Down Payment?As noted, an assumable mortgage allows you to take on the seller’s mortgage. So the mortgage rate, the remaining loan balance, and the remaining loan term all become yours.For example, say a home seller got a 2.75% 30-year fixed five years ago when mortgage rates hit record lows. Let’s pretend the loan amount was $500,000.Today, they’re selling the property and the outstanding balance is roughly $442,000. The remaining loan term is 25 years.It’d be great to inherit that low-rate mortgage from the seller instead of settling for a rate of say 6.5%.Here’s the tricky part. The difference between the new sales price and the outstanding loan amount.Let’s pretend the seller listed the property for $700,000. Remember, home prices have surged over the past decade, and even over just the past five years.In some metros, they’re up about 50% since 2019. So a price tag of $700,000 wouldn’t be unreasonable, even if the seller originally paid closer to $500,000.Do You Have $250,000 Handy?Putting these numbers together, a hypothetical home buyer would need more than $250,000 for the down payment.Most don’t even have 5% down to put on a house, let alone 20% down. This is closer to 36%!To bridge the gap between the new purchase price and the existing loan amount. Using simple math, about $258,000.While that might sound crazy, just take a look at the real listings above from Roam, which lists properties with assumable mortgages.Not only is that a large amount of money, it also means a good chunk of the purchase price will not enjoy the 2.75% financing.It will be subject to whatever the rate is on a second mortgage, or it’ll simply be tied up in the home and illiquid (assuming the buyer can pay it all out-of-pocket).Let’s pretend they’re able to get a second mortgage for a good chunk of it, maybe $200,000.If we combine the 2.75% first mortgage for $442,000 and say an 8% second mortgage for the $200,000, the blended interest rate is roughly 4.4%.Yes, it’s lower than 6.5%, but not that much lower. And many mortgage rate forecasts put the 30-year fixed in the 5s by next year.If you pay points at closing on a rate and term refinance, you might be able to get a low-5% rate, or potentially even something in the high-4s, assuming the forecasts hold up.Then it becomes a lot less compelling to try to assume a mortgage.Are You Choosing the House for the Mortgage?The other issue here is you might start looking at homes that have cheap, assumable mortgages.Instead of considering properties you might like better. At that point, you could wind up choosing the house because of the mortgage.And that just becomes a slippery slope of losing sight of why you’re buying a home to begin with.If you’re home shopping and happen to find out the loan is assumable, that’s perhaps icing on the cake.But if you’re only shopping homes that feature assumable mortgages, maybe it’s not the best move.Also note that the loan assumption process can be cumbersome and the seller might list higher knowing they are offering an “asset.”So in the end, once you factor in the blended rate and the higher sales price, and potentially a property that isn’t even ideal for your situation, you might wonder if it’s actually a deal. Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 18 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on Twitter for hot takes.Latest posts by Colin Robertson (see all)

Mortgage lenders reacted to the economic uncertainty in the nation and reduced their product offerings, especially those outside of the conforming box, for September.In the first two weeks of the month, the 30-year fixed rate mortgage dropped 26 basis points, according to Freddie Mac. But in the aftermath of the Federal Open Market Committee's 50 basis point reduction in the Fed Funds rate, mortgage rates have flattened and turned upwards again so far in October.The FOMC action in itself was a sign policymakers believe the U.S. economy is slowing, with the markets now expecting another 25 basis point reduction at its next meeting. However, the latest jobs report was better than forecast, and that has affected mortgage rates. As a result, lenders are remaining cautious about extending credit in the current environment, said Joel Kan, the Mortgage Bankers Association's deputy chief economist.Its Mortgage Credit Availability Index decreased 0.5% to 98.5, the first time it has tightened since last December.For August, the MCAI was 99, while in September 2023, it was at 97.2. The index has not been above the 100 baseline mark since March 2023, meaning that credit is tighter now than when the index was first calculated for March 2012."There was a decline in loan programs for cash-out refinances, jumbo and non-QM loans, including loans that require less than full documentation," Kan said in a press release. "Most component indexes decreased over the month, but the government index increased, driven by more offerings of VA streamline refinances."Among the components of the MCAI, the government product offerings increased 0.8% from August.The conventional index was down by 1.7%, with the jumbo portion 2.6% lower but the conforming segment was unchanged. The MBA's Weekly Application Survey for Oct. 4, which would cover the end of September, noted rising rates had impacted conventional refinance activity.The Veterans Affairs product, also known as Interest Rate Reduction Refinance Loans, has been a cause of concern for both Ginnie Mae and mortgage regulators in the past. They are worried that lenders are taking advantage of the ease in doing these loans and are churning (selling borrowers on a new loan after a short period of time following the initial origination) them.As previously reported, Optimal Blue's rate lock data for September found that cash-out activity was up 6.4% from August and 54.7% from a year prior, lagging rate-and-term refi growth of 49.4% and 644.2% respectively.Non-conforming locks, which would cover both jumbo and non-qualified mortgages, were 12.6% of the market in September, up 25 basis points from the previous month and 147 points from one year earlier.The 13.7% share of VA locks was 20 basis points higher from August and 328 basis points over September 2023.The MCAI is calculated using data from ICE Mortgage Technology and was indexed at 100 for March 2012.

The gap in home values between Hispanic and White owners narrowed to the lowest on record, recouping ground lost during the pandemic, according to research from Zillow Group Inc.Hispanic-owned houses are worth 11.9% less than those owned by non-Hispanic White households, compared with 12.4% in December 2021, a recent high in the gap, Zillow said in a blog post. At its worse, following the global financial crisis, the gap was as wide as 18%."Efforts to improve access to down payment assistance, credit-building programs, zoning reforms, and affordable housing construction and preservation in desirable areas are key initiatives to help this progress continue," Treh Manhertz, senior economic research scientist at Zillow, said in the post.Asian homeowners typically own the most expensive houses in the Zillow data. Black-owned homes have the lowest value among race groups. Although their gap with White-owned houses improved slightly in the past year, it's still wider than in mid-2007, before the housing crisis, according to Zillow.Homeownership is key to building wealth, and it's particularly true for Hispanic Americans. About 47.2% of their wealth is tied up in their primary residence, according to Federal Reserve data — much higher than other groups. The rise in housing prices since 2012 has created about $1.5 trillion in real estate wealth for Hispanic Americans over the period, based on Fed data.

Treasuries rallied the most in two weeks as tumbling oil prices eased concerns about an uptick in inflation.Yields on U.S. 10-year debt retreated from a two-and-a-half month high, falling more than five basis points to 4.05%. Session low yields were reached amid steeper declines for Canadian bond yields sparked by benign consumer prices data. Yields also declined in most European bond markets.Oil plunged more than 5% to below $70 per barrel on Tuesday following a report that Israel may avoid targeting Iran's crude infrastructure as part of retaliation for a barrage of missiles launched at it earlier this month. Investors have been growing increasingly concerned about a reacceleration of price pressures amid escalation in the Middle East and the prospect for inflationary policies from whoever becomes the next U.S. president."It looks like dealers simply have their machines tied to oil futures these days," said Christoph Rieger, head of rates and credit research at Commerzbank AG. "Whether it makes sense to adjust your long-term inflation view on the back of this is a different question."Crude prices have been on a rollercoaster in recent weeks as traders track the conflict in the Middle East, home to about a third of global supply. But concerns about inflation in the U.S. have also risen after a jobs report earlier this month showed robust wage growth, and a hotter-than-forecast read of consumer prices. Over the next four years, inflation is expected to rise above the Fed's long-run estimates whether Donald Trump or Kamala Harris win the presidency, according to a survey of 29 economists conducted Oct. 7 to 10.Canada's September consumer price index had a bigger-than-estimated decline in the year-on-year rate to 1.6%, the lowest since February 2021. U.S. September CPI reported Oct. 10 rose 2.4% year-on-year, also the lowest since 2021 but more than economists' 2.3% estimate.  

Last week, I argued that mortgage rates remain in a downward trend, despite some pullback lately.The 30-year fixed had almost been sub-6% when the Fed announced its rate cut. That “sell the news” event led to a little bounce for rates.Then a hotter-than-expected jobs report days later pushed the 30-year up to 6.5% and rates kept creeping higher from there.They’re now closer to 6.625% and have reignited fears that the worst may not yet be behind us.Whether that’s true or not, you can’t get a rate as low as you could just three weeks ago, and that makes the temporary buydown attractive again.You Don’t Get Your Money Back on a Permanent BuydownWhile some home buyers and mortgage refinancers were able to lock-in sub-6% rates in September, many are now looking at rates closer to 7% again.This has made mortgage rates unattractive again, especially since there aren’t many lower-cost options around these days, such as adjustable-rate mortgages.You’re basically stuck going with a 30-year fixed that isn’t worth keeping for anywhere close to 30 years.And you’re paying a premium for it because the rate won’t adjust for the entire loan term.One option to make it more palatable is to pay discount points to get a lower rate from the get-go.But there’s one major downside to that. When you buy down your rate with discount points, it’s permanent. This means the money isn’t refunded if you sell or refinance early on.You actually need to keep the loan for X amount of months to break even on the upfront cost.For example, if you pay one mortgage point at closing on a $500,000 loan, that’s $5,000 that will need to be recouped via lower mortgage payments.If rates happen to drop six months after you take out your home loan, and you refinance, that money isn’t going back in your pocket.It’s gone forever. And that can obviously be a very frustrating situation.Is It Time to Consider a Temporary Buydown Again?The other option to get a lower mortgage rate is the temporary buydown, which as the name implies is only temporary.Often, you get a lower rate for the first 1-3 years of the loan term before it reverts to the higher note rate.While these have been painted as higher-risk because they’re akin to an adjustable-rate loan, they could still bridge the gap to lower rates in the future.And perhaps most importantly, the money spent on the temporary buydown is refundable!Yes, even if you go with a temporary buydown, then refinance or sell a month or two later, the funds are credited to your outstanding loan balance.For example, if you’ve got $10,000 in temporary buydown funds and all of a sudden rates drop and a rate and term refinance makes sense, you can take advantage without losing that money.Instead of simply eating the remaining funds, the money is typically used to pay down the mortgage, as explained in Fannie Mae’s chart above. Say you’ve got $9,000 left in your temporary buydown account.When you go refinance, that $9,000 would go toward the loan payoff. So if the outstanding loan amount were $490,000, it’d be whittled down to $481,000.Interestingly, this could also make your refinance cheaper. You’d now have a lower loan amount, potentially pushing you into a lower loan-to-value (LTV) tier.What Are the Risks?To sum things up, you’ve got three, maybe your options when taking out a mortgage today.You can go with an ARM, though the discounts often aren’t great and not all banks/lenders offer them.You can just go with a 30-year fixed and pay nothing in closing for a slightly higher rate, with the intention of refinancing sooner rather than later.You can pay discount points at closing to buy down the rate permanently, but then you lose the money if you sell/refinance before the break-even date.Or you go with a temporary buydown, enjoy a lower rate for the first 1-3 years, and hope to refinance into something permanent before the rate goes higher.The risk with an ARM is that the rate eventually adjusts and could be unfavorable. As noted, they are also hard to come by right now and may not offer a large discount.The risk with a standard no cost mortgage is the rate is higher and you could be stuck with it if rates don’t come down and/or you’re unable to refinance for whatever reason.The risk with the permanent buy down is rates could continue falling (my guess) and you’d leave money on the table.And the risk of a temporary buydown is somewhat similar to an ARM in that you could be stuck with the higher note rate if rates don’t come down. But at least you’ll know what that note rate is, and that it can’t go any higher.Read on: Temporary vs. permanent mortgage rate buydowns Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 18 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on Twitter for hot takes.Latest posts by Colin Robertson (see all)

Warehouse lending is in flux following a series of recent events creating a mixed outlook for mortgage originations.For one thing, the return of policymakers' interest in making downward adjustments to the fed funds rate recently has helped with the costs associated with the short-term financing lines, which companies use to fund their originations prior to selling the loans.(Warehouse lines typically carry adjustable rates closely tied to fed funds.)"To take a broad-brush approach, the spread in warehouse improved to the originator," Michael McFadden, CEO of OptiFunder, noting that such conditions don't remain static as the relationship between short- and long-term rates changes with market gyrations over time.In addition, the players involved in warehouse lending have been in flux as banks review how involvement in the space affects their capital levels. Those capital levels are subject to pending rules currently going through a re-proposal process."I think that is a bigger driver of some of these bank decisions. They're looking at where higher capital charges make it more difficult to earn an appropriate return," McFadden said.New York Community Bank recently pulled backed from the business and Comerica's exited.However, while the withdrawal by some warehouse lending providers has raised questions about consolidation, new entrants like Scotiabank have been balancing the scales, said Susan Johnson, senior vice president at Scale Bank.(Scotiabank declined immediate comment on market conditions for this article.)"Some players have left, but others have come in," Johnson said, noting that some mortgage lenders have been looking to diversify their warehouse line providers to address the risk.Nondepositories in other sectors like hedge funds and insurers are showing more interest in warehouse lending assets, McFadden said."Nonbanks who don't have to deal with capital charges may see this as an opportunity to get in," he said.Meanwhile, warehouse line securitization has been another means of diversifying in this type of financing and managing its costs at loanDepot, said Jeff DerGurahian, the company's chief investment officer and head economist at the company.LoanDepot securitizations, which have collateral constraints that ensure all the loans are qualified mortgages, are competitive cost-wise relative to traditional warehouse lines, he said."All the loans are QM, so that we can sell the entire capital structure, and that gives us essentially a 100% advance rate on the warehouse line," said DerGurahian. "It's also viewed as committed warehouse space by the rating agencies and other counterparties, which some may have requirements for or view more favorably."It's a strategy that is not accessible to all lenders and has been limited by the industry's low volumes, but which may become more viable if monetary policymakers do continue to exert downward pressure on mortgage rates with their actions, he said."Historically, you would see this be anywhere from 10 to 30% of our warehouse book of business. It's been quiet the last couple of years, largely because origination volume has been down, and there hasn't been a need to issue more of these deals, but as hopefully the mortgage market here recovers a little bit and volume picks up, we would definitely consider future transactions," DerGurahian said.

Luke Sharrett/Bloomberg With two major disasters striking the U.S. within weeks, awareness of insurance challenges many homeowners encounter is coming to the fore, and servicers find themselves caught in the middle.Even before Hurricanes Helene and Milton slammed the Southeastern U.S., homeowners in several states, including storm-ravaged Florida, already were seeing skyrocketing premiums and the departure of several insurance carriers.With 2024 already one of the most devastating hurricane seasons this century, further price hikes and decreased availability are likely in the offing if recent historical trends are an indicator. As entities that regularly keep their eyes on mortgage borrowers' ability to pay, servicers frequently end up playing the role of bad cop when the insurance industry provides unpleasant surprises. "I'm sure that we are the deliverer of bad news, and this does not sit well with all homeowners," said Larry Goldstone, president of capital markets and lending at BSI Financial Services.Servicers can prepare themselves for expected borrower stress, though, applying strategies they've learned. Earlier this year, leaders discussed with National Mortgage News how current homeowners insurance challenges were impacting their customers and possible methods that might help alleviate concerns for stakeholders. Keeping borrowers informedWith servicers often holding funds in escrow to make premium payments on homeowners' behalf, BSI typically reaches out to customers two months or more in advance of insurance. The notification might be the first time a borrower realizes the extent of a premium increase, requiring their servicer to also plan accordingly. "To the extent that homeowners don't have enough money escrowed, we will then be adjusting their mortgage payment higher on a go-forward basis," Goldstone said. "I am sure that we're having some difficult conversations with homeowners."An increasing number of homeowners today, though, seem to realize a hit to their wallet might be in store and are educating and preparing themselves. Their efforts to become better informed have eased stress on servicers. As news of the high cost of insurance spreads through news or social media, "the conversation is actually much better than it used to be," said Adel Issa, senior vice president of customer contact and loss mitigation for Carrington Mortgage Services. "It's part of everybody's vernacular now that, 'My insurance premium went up, not necessarily, my mortgage went up.'"Still, sticker shock leads to disgruntled customers, but detailed breakouts of the individual amounts on a bill at least brings them clarity."A lot of people understand immediately. We tend to be very detailed in our letters that we send out to our customers regarding before/after," Issa said. Lessening the blow to borrower financesFannie Mae and Freddie Mac, which require certain types of insurance on the loans they purchase, have suggested that large spikes in monthly payment amounts could be spread over time to lessen the effect of impact on borrowers, Goldstone noted."We have some latitude there around what we can do," Goldstone said. "We can spread the increment over a year, or anything from a year to five years. We can try to cushion the blow there a little bit."However, such efforts to help a borrower could affect servicer cash flow detrimentally in a way that must be accounted for as well. While a borrower's payments can be spread out, the servicer is still remitting the full premium amounts to insurers. "We're effectively loaning the borrower money at zero interest and then recovering it over time," Goldstone said.When costs are still too highWhen vulnerable communities see insurance carriers leave or costs jump to insurmountable levels following natural disasters, the search for coverage produces greater stress to already struggling borrowers. Servicers can better assist clients through self-help tools or by placing opportunities to find assistance in their client portals. Carrington's borrower dashboard called Homeamp also allows borrowers to take a detailed look at their account and may be able to offer options separate from new insurance coverage, including second liens or refinances, to reduce overall payment amounts.  "There's all those little things that are unique to the customer. So Homeamp is unique to what the customer's actual numbers are," Issa said.BSI puts a link to a third-party marketplace on its portal and website that lists a range of homeowners insurance coverage beyond the most well-known brands. "There are lots of other insurance carriers out there that homeowners might not have heard of that operate in the market they're in," Goldstone said. "It's become much more valuable for homeowners in light of what has happened with insurance premiums over the last couple of years." Some insurance carriers on the marketplace often require consultations meant to help borrowers make the most cost-effective choice.The insurance of last resort Lender-imposed coverage becomes the solution of last resort when a client can't or refuses to obtain adequate coverage. When efforts have been exhausted, servicers have a right to force place insurance to ensure compliance. The coverage, though, typically will not cover homeowner possessions and is much more expensive than insurance the borrower could find themselves.  "That's going to have a deleterious impact on the borrower's monthly mortgage payment, or potentially put the borrower at risk of defaulting or delinquent," Goldstone said. Servicers can be protected if a home proceeds through foreclosure after force-placed insurance is applied, though. Servicers will likely have made insurance payments if clients refuse, entitling them to recovery upon liquidation."We're at the top of the waterfall," he added.

Gabby Jones/Bloomberg This news is developing. Please check back here for updates.JPMorgan Chase reported a steep year-over-year increase in credit costs Friday, as the largest U.S. bank by assets sought to cover a surge in net charge-offs and added $1 billion in reserves.For the third quarter, the megabank's provision for credit losses more than doubled to $3.1 billion. Net charge-offs for the three months ended Sept. 30 were $2.1 billion, up 40% year over year and largely driven by card services, JPMorgan said. A year ago, the bank recorded a net reserve release of $113 million.The majority of net charge-offs occurred in JPMorgan's consumer and community banking segment, which includes its credit card business. Net charge-offs in the segment totaled $19 billion, up $520 million from the year-ago quarter and driven by card services, the bank said.Despite signals that the U.S. economy is improving, JPMorgan boosted its reserves for credit losses by $876 million. In a press release announcing the results, the company said reserve build was largely tied to card services, which experienced "growth in revolving balances and changes in certain macroeconomic variables."Overall, the higher provision put a crimp in JPMorgan's net income, which was $12.9 billion, down 2% compared with the third quarter of 2023. Still, the company's earnings per share topped expectations at $4.37. Analysts polled by S&P had expected earnings per share of $3.98.Revenue for the period was $43.3 billion, up 6% year over year. The company's net interest income was a factor, up 3% for the quarter, while noninterest income rose 11%, the bank said. Fee income included a 29% increase in investment banking revenues. JPMorgan raised its guidance for full-year net interest income and full-year expenses. The company now projects net interest income will be about $92.5 billion for 2024, up from the forecast of $91 billion that it provided in July. Full-year expenses, excluding legal fees but including an early special assessment by the Federal Deposit Insurance Corp. and a contribution to the firm's foundation, are now forecast to be $91.5 billion, about half a billion dollars less than what it laid out this summer.Last month, at a conference, President and Chief Operating Officer Daniel Pinto warned that analysts' expectations for 2025 revenue and expenses are "not very reasonable," since lower interest rates would reduce interest income and inflation is keeping costs elevated.Consensus estimates for 2025 include $90 billion in net interest income and $93.7 billion in expenses. The day of Pinto's comments, the bank's shares fell by 7% at some points. The stock is currently up about 25% for the year. In Friday's press release, Chairman and CEO Jamie Dimon commented on recent regulatory moves, saying, "We await our regulators' new rules on the Basel III endgame and the G-SIB surcharge as well as any adjustments to the SCB or CCAR. We believe rules can be written that promote a strong financial system without causing undue consequences for the economy, and now is an excellent time to step back and review the extensive set of existing rules — which were put in place for a good reason — to understand their impact on economic growth, the viability of both public and private markets, and secondary market liquidity."

Wells Fargo's third-quarter profits fell as earnings were hit by a $447 million net loss from restructuring its debt investments and an 11% drop in net interest income.The San Francisco bank said Friday its net income slid to $5.1 billion in the three months ended Sept. 30, from $5.8 billion a year ago. Rising costs on customers' deposits have pinched the company's margins over the past year, and the pressure appears to have continued in the last quarter. Net interest income fell to $11.7 billion from $13.1 billion in the year-ago quarter, and the company told investors to expect its full-year figure to be down 9%.Net income of $1.42 per diluted common share came in above analyst estimates of $1.28 per share, according to S&P Capital IQ data.Noninterest income rose to $8.7 billion from $7.8 billion a year ago, driven by Wells Fargo's venture capital investments and investment banking fees, a business the company's been overhauling in recent years.Provisions for credit losses were down 11% from a year ago to $1.1 billion, with lower allowances across most loan portfolios partially offset by a higher allowance for credit card loans that was driven by an increase in balances, the bank said.CEO Charlie Scharf, who came onboard to overhaul the bank in late 2019, said, "Our earnings profile is very different than it was five years ago as we have been making strategic investments in many of our businesses and de-emphasizing or selling others. Our revenue sources are more diverse and fee-based revenue grew 16% during the first nine months of the year, largely offsetting net interest income headwinds.""While our risk and control work remains our top priority, we continue to invest to drive more diverse and stronger growth and higher returns," Scharf said, citing the launch of two co-branded credit cards and a multi-year co-branded agreement for auto financing.The results came weeks after Wells Fargo was hit with an enforcement action from bank regulators, which cited shortcomings in how the company guards against money laundering. Some investors have since worried that Wells Fargo, which earlier this year looked to be in better shape with regulators, may be further away from getting freed from a regulatory-imposed asset cap.Bloomberg News reported last month that Wells Fargo submitted an outside review of its reformed operations to the Federal Reserve, a milestone in the company's work. The Fed imposed the asset cap in 2018 following the bank's consumer abuse scandals. The timeline has stretched far beyond what now-ousted executives once hoped. But investors have salivated over the possibility that the Scharf-led turnaround is almost complete, potentially supercharging the bank's growth. The bank's stock price has risen 17% this year partly over those hopes.