by Calculated Risk on 3/14/2007 10:53:00 PM

Wells Fargo has confused investors by including co-issue loans in their subprime loan production.

According to most sources, Wells Fargo was the #1 originator in 2006 with $83 Billion in subprime loans.

But that included co-issue loans. Going forward Wells Fargo will only report the subprime loans it originates.

From MarketWatch: Top 10 subprime originators lean to left coast

... San Francisco-based Wells Fargo [reported] $7.4 billion in subprime mortgages [in Q4 2006]. That [appears to be] a steep drop from the third quarter when the banking company was the biggest subprime originator by far, with $23 billion in loans ...

The drop reflects a change to the way Wells Fargo reports its subprime mortgage originations to the trade press.

Prior to the fourth quarter, the banking company included co-issue loans, or mortgages for which it had bought the servicing rights while an investor such as an investment bank purchased the underlying loans.

"Including co-issues in our nonprime loan production was confusing investors and others," said Wells Fargo spokesman Jay Lawrence. As of the fourth-quarter, the company started to report only the subprime mortgages it originated, he said.