Wells Fargo & Company

Wells Fargo Home Mortgage

ASF Conference

February

2008

Wells

Fargo

Asset

Securities

Corporation

has

filed

a

registration

statement

(including

prospectus)

with

the

SEC

for

the

offering

to

which

this

communication

relates.

Before

you

invest,

you

should

read

the

prospectus

in

that

registration

statement

and

other

documents

Wells

Fargo

Asset

Securities

Corporation

has

filed

with

the

SEC

for

more

complete

information

about

Wells

Fargo

Asset

Securities

Corporation

and

this

offering.

You

may

get

these

documents

for

free

by

visiting

EDGAR

on

the

SEC

website

at

www.sec.gov.

Alternatively,

Wells

Fargo

Asset

Securities

Corporation

or

any

underwriter

or

any

dealer

participating

in

the

offering

will

arrange

to

send

you

the

prospectus

if

you

request

it

by

calling

toll-free

1-866-835-1033.

2

Forward Looking Statements

This presentation may include forward-looking statements about

Wells Fargo. Broadly speaking, forward-looking statements include

projections of revenues, income, earnings per share, capital

expenditures, dividends, capital structure; credit quality or other

financial items; descriptions of plans or objectives of management

for future operations, products or services, including pending

acquisitions; forecasts of future economic performance; and

descriptions of assumptions underlying or relating to any of the

foregoing.”

Forward-looking statements discuss matters that are not facts, and

often include the words “believe,”

“expect,”

“anticipate,”

“intend,”

“plan,”

“estimate,”

“project”, “target,”

“will,”

“can,”

“would,”

“should,”

“could”

or “may.”

You should not unduly rely on forward-

looking statements. They give our expectations about the future and

are not guarantees. Forward-looking statements speak only as of the

date they are made, and we do not undertake to update them to

reflect changes that occur after the date they are made.

3

Contents

Wells Fargo Overview

WFHM Originations

Non-Agency Prime

–

Non-Agency Prime Credit Policy Changes

–

Non-Agency Prime Default Levels

Non-Agency Alt-A

–

Non-Agency Prime Alt-A Credit Policy Changes

–

Non-Agency Prime Alt-A Default Levels

Subprime

–

Subprime Credit Policy Changes

Wells Fargo Real Estate Servicing

Reverse Mortgages

4

Overview

5

Overview

Wells Fargo is a well-capitalized institution with a long-

term enthusiastic commitment to mortgage lending.

We offer consistent credit quality and dependable

collateral flow.

As we strive to improve the borrower experience, we will

continue to offer investors the same prudent credit

stance.

Our purpose has always been the cultivation and

appreciation of long-term liquidity from our valued

investor group.

6

Our company is well-funded.

We continue to responsibly make new residential real estate loans

to a wide spectrum of consumers across the nation.

Our responsible lending and servicing practices have contributed

to better performance than many competitors.

–

Subprime loans originated by Wells Fargo historically have had

foreclosures approximately half that of loans not originated by

Wells Fargo.

We keep customers in their homes.

–

Our foreclosure rate was only 0.88%* of our servicing portfolio,

which throughout 2007 was more than 20% better than the

industry average. 

Positioned for Success

* 0.88% represents the foreclosure % of mortgages serviced by Wells Fargo Bank, N.A. as of

December 31, 2007.

7

A Unique Company

Wells Fargo Bank, N.A., has the highest possible credit rating by

Moody’s Investor Services, “Aaa,”

and is the only bank in the

U.S. to have the highest possible credit rating by Standard &

Poors Rating Services, “AAA.”

Our Vision

“We want to satisfy

all of our customer’s

financial needs,

help them succeed financially,

be

the

premier

provider

of

financial

services

in

every

one

of

our

markets,

and

be

known

as

one

of

America’s

great

companies.”

8

Powerful Distribution Network

Source: Wells Fargo Today, 4

th

quarter 2007 statistics

9

Earnings Diversity

Wholesale

Banking/Commercial

Real Estate

9%

Community

Banking

34%

Specialized

Lending

17%

Investments

& Insurance

17%

Home Mortgage

& Home Equity

17%

Consumer

Finance

6%

Earnings

based

on

normalized

historical

averages

and

near

future

year

expectations.

80+ Businesses

Not just a bank

10

Wells Fargo & Company At A Glance

America’s #1 retail mortgage lender

(1)

America’s #1 servicer of home mortgages

(2)

America’s #1 retail originator of reverse mortgages

(3)

America’s #1 FHA/VA producer

(4)

Leading provider of personal credit and nation’s #2 prime home equity lender

(5)

A $575 billion diversified financial services company with 160,000 team

members who provide banking, insurance, investments, mortgage and

consumer finance for more than 23 million customers.

1

Wells

Fargo

Today,

4th

quarter

2007

4

EOY

2006

data

compiled

by

Inside

Mortgage

Finance

–

3/2/2007

2

EOY

2006

data

compiled

by

Inside

Mortgage

Finance

–

2/09/2007

5

Wells

Fargo

Today,

4th

quarter

2007

3

Wells

Fargo

Today,

4th

quarter

2007

16th

Most Admired

Company in the World

BARRON’S

BARRON’S

FORBES

FORBES

FORTUNE

FORTUNE

Best Managed Company

in U.S. Banking

19th

Most Profitable

Fortune 500 Company

11

Responsible Mortgage Lending Principles

We will only make a loan if it offers a demonstrable benefit to the customer.

We provide consumers with the information necessary to make fully-informed

decisions about the terms of our loans.

We

only

approve

applications

for

loans

where

we

believe

the

borrower

has

the

ability

to

repay

the

loan

according

to

terms.

Pricing

on

all

loans

is

fully

disclosed,

competitive

and

reflective

of

the

customer’s

financial

picture

and

credit

history,

the

characteristics

of

the

transaction

and

the

property

involved.

We

offer

prime

pricing

options

to

all

first

mortgage

customers

who

qualify

based

on

their

credit

characteristics

and

the

terms

of

their

loan

transactions. 

We

cap

origination

and

lender

fees

and

maintain

loan

pricing

that

is

competitive

and

appropriate

based

on

the

market

place

and

the

consumer’s

financial

picture

and

credit

history.

Our

prepayment

fee

periods

are

limited

to

the

lesser

of

three

years

or

the

fixed

term

of

an

adjustable

rate

loan.

12

Originations

13

Wells Fargo Home Mortgage Products

Loan origination –

complete spectrum of products

•

Government (FHA / VA)

•

Fannie Mae / Freddie Mac eligible

•

Non-Agency Prime

•

Alt-A

•

Subprime

•

Reverse

Continue to offer a wide range of mortgage products to

consumers across the credit spectrum

Continue to offer non-conforming products, originated

under prudent credit policies*

Actively adjust credit policy to address changing market

conditions

*Variations

from

the

underwriting

guideline

changes

may

occur

at

the

discretion

of

the

underwriter

based

on

compensating

factors.

14

$0

$100

$200

$300

$400

$500

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Alt-A

Nonprime

Prime

In Billions

Home Mortgage Origination Mix

15

WFHM Origination Channels

Originates loans that are referred from mortgage brokers that sell

and process loans to consumers.  Mortgage broker clients tend to

be smaller in scale, concentrating on sales and marketing

functions that require interaction with customers.  In most cases,

Wells Fargo Home Mortgage underwrites and closes loans at one

of its several Wholesale Processing Centers.

Wholesale

Purchases loans from larger mortgage banking and bank clients

that originate, underwrite and close mortgage loans before selling

them to Wells Fargo.

Correspondent

Centralized platform for Relocation Borrowers, Affinity

Relationships, Joint Ventures, Retention Programs, Employee and

Internet originations.

Centralized

Retail

Originates loans directly to consumers via more than 10,000

mortgage consultants located in over 1,000 Mortgage Stores. 

Loans are processed and underwritten at branches, one of 48

Mortgage Application Processing (MAP) centers, or through the

Service Delivery Connection (SDC) operation centers.

Distributed      

Retail

16

2007 WFHM Funding Mix

Retail:                           

$115B

Correspondent:

$80B

Wholesale:

$38B

Retail

Correspondent

Wholesale

16%

50%

34%

17

Non-Agency Prime

18

SEC Registered Prime Shelf Program

Wells Fargo Mortgage Backed Securities (WFMBS)

–

Prime Fixed and ARM Collateral

WFMBS Securitized Product Line

–

Fixed 30

–

Fixed 15

–

Fixed 30 Relocation

–

3/1, 5/1, 7/1, 10/1 CMT or Libor ARMs

–

3/1, 5/1, 7/1, 10/1 Relationship ARMs

•

The

Relationship

ARM

provides

interest

rate

reductions

to

reward

customers

who

have

existing

or

new

relationships

with

Wells

Fargo

Bank.

Borrowers

must

maintain

their

relationship

after

closing

in

order

to

keep

their

relationship

pricing.

19

Prime Subordination Levels

Representative Levels from       

November 2007  -

January 2008

S&P

2.75%

Fixed 30 Relo

Moody's

3.75%

Fixed 30

Moody’s

2.55%

Fixed 15

Moody's

3.95%

10/1 ARMS

Moody's

5.20%

7/1 ARMS

Fitch

4.70%

5/1 ARMS

Rating Agency

Senior

Subordination

Level

Product Type

20

WFHM Recent Non-Agency Prime Collateral Profiles

3%

2%

7%

0%

0%

Investor Property

88%

93%

85%

93%

80%

Primary Residence

11%

13%

13%

16%

24%

Cash Out

45%

51%

45%

43%

49%

Risk Model Decisioned Reduced Doc

20%

13%

13%

12%

4%

Borrower Chosen Reduced Doc

35%

35%

41%

45%

46%

Full Doc

77%

82%

80%

87%

80%

Single Family

26%

42%

43%

34%

23%

California

747

740

739

744

759

WAFICO

72%

76%

74%

72%

61%

WALTV

6.73%

6.59%

6.59%

6.77%

6.27%

Gross WAC

Dec-07

Nov-07

Nov-07

Jan-08

Jan-08

Settle Date

10/1 Arm

7/1 Arm

5/1 Arm

Fixed 30

Fixed 15

Product

Prime

21

Non-Agency Prime Credit Policy Changes

22

Non-Agency Prime Underwriting

100% CLTV financing eliminated other than Corporate Relocation program

Additional requirements for credit scores below 680

Additional restrictions on borrower selected verification of assets option

DTI reduction from 45% to 38% for limited doc/verification of assets option

Restrictions to documentation options for non-self employed borrowers

LTV reductions

Addition of an At Risk Policy for declining and distressed markets

Increased documentation requirements for reasonableness of income on stated

income and asset loans

Investment properties in Correspondent lending require documentation of gross

rents

Elimination of borrower selected stated income/stated asset

Credit Policy –

What Sets Us Apart

23

100% CLTV maximum

–

100% CLTV financing is no longer allowed within the program

FICO below 680

–

FICO floor is 620

–

FICOs below 680 have additional restrictions based on the risks in the

transaction as evaluated in our internal risk model.

Borrower-selected

limited doc/verification of assets documentation

option

–

Maximum LTV/CLTV = 80%

–

Minimum FICO score = 720

–

Reserve requirements = 30% of loan amount

–

Only one limited doc/verification of assets transaction per borrower for a

second home is allowed in a 12-month period with Wells Fargo.

Non-Agency Prime

2007 Policy Changes –

Underwriting

24

Non-Agency Prime

2007 Policy Changes –

Underwriting

DTI

–

Maximum 38% DTI for limited doc/verification of assets

Requirements: verification of assets documentation option

–

To be eligible, at least one borrower must receive income from self

employment.

–

If a self-employed borrower also receives W2, passive or unearned income,

this income must be fully documented when choosing

limited doc/verification of assets.

–

If the borrower is self-employed and the co-borrower receives W2, passive

or unearned income, this income must be fully documented when choosing

limited doc/verification of assets.

25

LTV/CLTV

LTV/CLTV greater than 90% / 90% requires all of the following:

•

Full documentation option

•

Acceptable internal risk score

•

Maximum DTI of 38%

•

1-2 unit properties only

•

Primary residences only

Creation of an At Risk Markets appraisal policy matrix

Introduction

of

distinct

standards:

soft,

distressed

or

severely

distressed

markets

Reduction

of

LTV

limits

to

eligible

maximum

financing

terms

when

the

market

is on the list, dependent upon market classification (ranging from 75% to 85%)

Quarterly updates performed for additions or deletions from the At Risk

Markets matrix

Non-Agency Prime

2007 Policy Changes –

Underwriting

26

Reasonableness of income evaluated and documented for stated income

transactions

–

Review & document income disclosed deemed reasonable

–

Credit profile supports income and assets disclosed

–

Assets are consistent with stated income

–

Overall transaction risk appropriate with stated income

Institutional Lending –

Correspondent investment (non-owner occupied)

properties:

–

Client must provide documentation of gross rents on all Investment

Properties, whether single family, multi-family 2, multi-family 3 or multi-

family 4.

Elimination of borrower selected stated income/stated asset

–

Removed across the non-conforming fixed rate and ARM product set

Non-Agency Prime

2007 Policy Changes –

Underwriting

27

Non-Agency Prime Default Levels

28

Non-Agency Prime Policy Change Impacts

Volume

Policy retractions impacted approximately 39% of funded volume

from Jan 07 –

May 07.

Performance

Approximately 56% of Early Stage Delinquency* Loans, 66% of

Ever 90+, & 66% of Ever Foreclosure  would have been impacted.

*Early Stage Delinquency is defined as a loan that ever went 60 days past due within four months from origination.  

29

2006 WFMBS Securities

Note:  The "Non Retraction" curve represents the cumulative default % of those loans that would have still met the

criteria under the underwriting guidelines as of Dec 31, 2007.  The "Retraction" curve shows the cumulative default % of

those loans that would not have met the requirements under the underwriting guidelines as of Dec 31, 2007.

2006 WFMBS  FIXED

0.0%

0.5%

1.0%

1.5%

2.0%

0

5

10

15

20

25

30

Month Seasoning

Non Retraction

Retraction

Grand Total

2006 WFMBS  ARM

0.0%

0.5%

1.0%

1.5%

2.0%

0

5

10

15

20

25

30

Month Seasoning

Non Retraction

Retraction

Grand Total

30

2007 WFMBS Securities

Note:  The "Non Retraction" curve represents the cumulative default % of those loans that would have still met the

criteria under the underwriting guidelines as of Dec 31, 2007.  The "Retraction" curve shows the cumulative default % of

those loans that would not have met the requirements under the underwriting guidelines as of Dec 31, 2007.

2007 WFMBS  FIXED

0.0%

0.5%

1.0%

1.5%

2.0%

0

5

10

15

20

25

30

Month Seasoning

Non Retraction

Retraction

Grand Total

2007 WFMBS  ARM

0.0%

0.5%

1.0%

2.0%

0

5

10

15

20

25

30

Month Seasoning

1.5%

Retraction

Grand Total

Non Retraction

31

Non-Agency Alt-A

32

SEC Registered Non-Agency    

Prime Alt-A Shelf Program

Wells Fargo Alternative Loan Trust (WFALT)

–

Non-Agency Prime Alt-A Fixed and ARM Collateral (formerly

included Alt-A minus)

Non-Agency Prime Alt-A Securitized Products

–

Fixed 15

–

Fixed 30

–

3/1 CMT and Libor ARMs

–

5/1 CMT and Libor ARMs

–

7/1 CMT and Libor ARMs

–

10/1 CMT and Libor ARMs

–

Fixed 40 Yr w/30 yr balloon

33

Non-Agency Prime Alt-A Subordination Levels

Representative Levels from

the 2

nd

Half of 2007

S&P

4.75%

Fixed

S&P

5.75%

10/1 ARMS

S&P

7.50%

5/1 ARMS

Rating Agency

Senior

Subordination

Level

Product Type

34

WFHM Non-Agency Prime Alt-A

December 2007 Originations

26%

27%

Investor Property

56%

59%

Primary

18%

23%

Cash Out

30%

31%

Other Doc Levels (Stated Income/Stated

Asset, No ratio, and No Doc)

52%

36%

VOA

17%

33%

Full Doc

36%

57%

Single Family

43%

13%

California %

706

722

WAFICO

77%

81%

WALTV

7.31%

7.58%

Gross WAC

ARM

Fixed

Product

Prime Alt-A

35

Non-Agency Prime Alt-A Credit Policy Changes

36

Expanded Financing Alternative Prime Alt-A (EFA)

Prime Alt-A (EFA) Changes

Introduction of the At Risk Market policy to EFA.

Implement Internal AVM controls to assess full appraisal value

FICO threshold set by occupancy / property type

3-4 multi family change to allowable doc types.

Collections accounts/charge-offs / judgments or lien policy contraction

Introduction of mandatory tax and insurance escrows.

Updates to the definition of rural property.

Additional documentation added to the Large Increase in Value policy.

Adjusted program to align with government agencies for sale of loan to

Fannie and Freddie.

37

Expanded Financing Alternative Prime Alt-A (EFA)

Prime Alt-A (EFA) Changes

Introduction of Declining Markets List Policy

–

LTV/CLTV reduction when the market is identified as “declining.”

Implement internal AVM controls to assess full appraisal value

–

Define

appraisal

valuation

review

policy

and

provide

guidance

on

testing

appraisals.

–

Reduced the allowable age of the appraisal at the time of underwriting

decision.

FICO threshold set by occupancy / property type

–

660 Primary

–

680 Second home

–

680 Investment property

–

700 Condotel

–

700 Foreign national borrower

38

Expanded Financing Alternative Prime Alt-A (EFA)

Prime Alt-A (EFA) Changes

3-4 Multi Family change to allowable doc types.

–

Full documentation or stated income with verified assets (VOA) only

Collections accounts/charge offs/judgments or lien

–

Restrictions on allowable accounts at time of closing

Introduction of mandatory tax and insurance escrows.

–

Tax and insurance escrows required on loans with an LTV above 80%.

–

Subject to state laws

–

Where a loan is in flood zone, with tax and insurance escrows, flood included

Updates to the definition of rural property.

–

Clarification on criteria for rural underwriting consideration including: zoning

classification, outbuildings customary to rural, area built up less than 25%, low population

density.  Loans classified as rural may require an LTV reduction.

Additional documentation added to the Large Increase in Value policy.

–

Reason for increase must be documented by appraiser, be proportionate and make sense.

–

File must contain documentation for reasons cited by appraiser (e.g. documented home

improvements, etc.)

39

Expanded Financing Alternative Prime Alt-A (EFA)

Prime Alt-A (EFA) Changes

Adjusted program parameters to align with government agencies,

allowing sale to Fannie Mae and Freddie Mac.

–

Loan limits lowered to Fannie Mae / Freddie Mac standards

–

Underwriting guidelines modified in support of agency salability

standards.

40

Non-Agency Prime Alt-A Default Levels

41

2007 WFALT Securities

There were no

WFALT

securities

issued in 2006.

Note:  The "Non Retraction" curve represents the cumulative default % of those loans that would have still met the

criteria under the underwriting guidelines as of Dec 31, 2007.  The "Retraction" curve shows the cumulative default % of

those loans that would not have met the requirements under the underwriting guidelines as of Dec 31, 2007.

2007 WFALT  FIXED

0.0%

0.5%

1.0%

1.5%

2.0%

0

5

10

15

20

25

30

Month Seasoning

Non Retraction

Retraction

Grand Total

2007 WFALT  ARM

0.0%

0.5%

1.0%

1.5%

2.0%

0

5

10

15

20

25

30

Month Seasoning

Non Retraction

Retraction

Grand Total

42

Subprime

43

SEC Registered Nonprime Shelf Program

Wells Fargo Home Equity Trust (WFHET)

–

Subprime Collateral (formerly included Alt-A minus)

Subprime Securitized Products

–

5/6 LIBOR ARM

–

30 Year Fixed

–

15 Year Fixed

–

30/15 Balloon

–

40/30 Fixed Balloon

44

Subprime Originations -

December 2007

The following table includes all Subprime loans funded in December 2007,

underwritten to the guidelines in effect beginning October 1, 2007.

97.7%

Fixed Rate

2%

Investor Property

97%

Primary Residence

50%

Cash Out

100%

Full Doc

93%

Single Family

12%

California

623

WAFICO

74%

WALTV

9.57%

Gross WAC

Subprime

45

Securitizations Backed by 100% Wells Fargo

Collateral (Alt-A Minus and Subprime)

ABFC 2005-WF1

ACE 2005-WF1

SASCO 2005-WF1

SASCO 2005-WF2

SASCO 2005-WF3              

SASCO 2005-WF4

CMLTI 2006-WFHE1

CMLTI 2006-WFHE2

CMLTI 2006-WFHE3

NHELI 2006-WF1  

SASCO 2006-WF1

SASCO 2006-WF2

SASCO 2007-WF1              

SASCO 2007-WF2

CMLTI 2007-WFHE1

CMLTI 2007-WFHE2

CMLTI 2007-WFHE3

CMLTI 2007-WFHE4

HASCO 2007-WF1

WFHET 2005-1

WFHET 2005-2

WFHET 2005-3

WFHET 2005-4

WFHET 2006-1

WFHET 2006-2

WFHET 2006-3

WFHET 2007-01

WFHET 2007-02

Subprime

CMLTI 2005-WF1          

CMLTI 2005-WF2

GSAA 2005-1        

GSAA 2005-12       

GSAA 2005-3      

GSAA 2005-5      

GSAA 2005-9       

NAAC 2005-WF1

CMLTI 2006-WF1             

CMLTI 2006-WF2

JPMMAT 2006-WF1          

LXS 2006-WF1                                            

Soundview HLT 2006-F1                

Soundview 2006-WF2

HALO 2007-WF1

BCAP 2007-AB1

LXS 2007-1

LXS 2007-9

WFALT 2005-2

Alt-A Minus

2005

2006

2007

2005

2006

2007

Collateral

Type

Dealer Shelves

Wells Fargo Shelves

46

Subprime Credit Policy

47

Subprime Credit Policy Changes

WFHM continuously reviews its operations and makes changes to best

manage conditions facing the national mortgage market.

As part of its commitment to fair and responsible lending, WFHM has

tightened credit policy since late 2006.

–

Major changes include:

•

WFHM has exited the Wholesale and Correspondent Alternative Lending

Channels.

•

The Expanded Financing Alternatives

SM

(Alt-A Minus program) has been

eliminated.

•

WFHM had a stated income program for FICOs over 620, this program was

eliminated.

•

WFHM no longer offers second liens in subprime channel.

•

All ARM and interest-only loans qualify at the fully-indexed rate and fully

amortized payment.

•

3-4 unit properties are no longer allowed as second homes or investment

properties.

•

Changes made to LTV limits and debt-to-income limits

48

Subprime Major Credit Policy Change Timeline

Product & Program Eliminations:

Product & Program Eliminations:

:

April 2007

–

Second Liens

July 2007

–

1-Year treasury Arm

–

2/28 Arm

–

2/28 30/40 balloon Arm

–

3/27 Arm

September 2007

–

EFA Alt-A Minus program

October 2007

–

Stated income over 620 FICO program

–

3-4 unit second homes and 3-4 investment properties

–

1x90 and 1x120+ housing payment history loans

–

Condotels

–

Foreign nationals

49

Subprime

Credit Policy

Highlights

Highlights

-

-

FICO

FICO

Score

Score

Minimums

Minimums

Minimum FICO Scores

520 at 0x30 housing history

560 at 1x30 or worse

Borrowers with no credit score are not eligible for financing

Minimum FICO Score for 95% CLTV

600

Minimum FICO score for Second Homes, Non-Owner Occupied/Investment Property

620

50

Subprime

Credit Policy

Highlights

Highlights

-

-

General

General

Guidelines

Guidelines

First-Time Homebuyer Parameters

–

Limited to 1-unit or 2-unit primary residence only

–

12-month housing payment history required

–

2 months PITI reserves required

Maximum Loan Amount

–

$1 Million

Seller Concessions

–

Maximum 6% seller concession (2% maximum for investment properties) is reduced or eliminated

at certain LTVs and in At Risk Markets.

Seasoning Requirement

–

Require 6-month owner-of-record seasoning for primary and second home (purchase and cash-

out/debt consolidation transactions) and investment property (purchase and rate/term refinance

transactions)

–

No more than 2 non-owner occupied transactions per borrower allowed in any 12-month period

51

Subprime Credit Policy

Highlights

Highlights

-

-

General

General

Guidelines

Guidelines

Debt-to-Income Ratio*

Maximum DTI 55%

1-2 unit primary residence only

Minimum FICO score 540

Minimum FICO score 620 if interest only

Maximum DTI 50%

If FICO score < 540

If LTV/CLTV > 90%

For cash-out/debt consolidation transactions

For investment properties or second homes

For 3-4 unit

For lite doc

*Residual income requirements must always be met

Non-conforming loan amounts $1500 for the household

Conforming loan amounts $600 for an individual, $800 for entire household

52

Servicing

53

Service Loans for Wells Fargo and Others

Wells Fargo Originations

Wells Fargo Originations

–

Prime and nonprime loans (Retail, Wholesale, Correspondent)

•

Most sold to investors, generally retain the servicing rights

Other Lenders/Investor Loans

Other Lenders/Investor Loans

–

Mortgage servicing rights we purchase

•

Do not own the assets, just the servicing rights

•

Includes mortgage servicing rights acquired through servicing acquisitions

•

Greatest percentage of these loans held by investors

–

Mortgage servicing we have agreed to service under a contract

•

Do not own the assets or servicing rights

–

Troubled loans we service for other investors

•

Loans already delinquent or in foreclosure that we service at the request of

another investor due to our expertise

A leading national mortgage servicer with $1.53 trillion in loans serviced,

and more than 10 million servicing customers.

54

Servicing Portfolio

20%

3%

77%

Wells Fargo Home Mortgage

Prime and Nonprime Loans

Mortgages originated by WFHM team members

and third-party brokers or correspondents

Wells Fargo Consumer Credit Group

Prime Loans

Home equity, personal credit and education finance

Wells Fargo Financial

Primarily Nonprime Loans

Debt consolidation refinances that may help

borrowers improve their financial situations

Chart reflects real estate backed lending servicing portfolio as

of September 30, 2007.

55

Leading Industry Change

FAST TRACK REFINANCE OR MODIFICATION

FAST TRACK REFINANCE OR MODIFICATION

The ASF framework was intended to help 1.8M consumers with subprime ARM loans resetting by end of 2009

–

Partnered with government, regulators, and American Securitization Forum to create 

solution that satisfies the needs of consumers and investors

HOPE NOW ALLIANCE

HOPE NOW ALLIANCE

Leverages power of the public and private sectors to reach 9 of every 10 at-risk consumers and work with them on

solutions

–

Mission includes national outreach, since contact is biggest obstacle in helping consumers.

–

Improves collaboration between servicers and not-for-profit credit counselors

–

Wells Fargo building pilot technology program using Early Resolution software

–

Net Present Value used to balance the interests of homeowners and investors

OTHER WELLS FARGO SOLUTIONS

OTHER WELLS FARGO SOLUTIONS

Wells Fargo Home Mortgage subprime ARM customers

–

3% of 7.9 million loans serviced by Wells Fargo Home Mortgage are subprime ARMs resetting

by the end of 2008.

INDUSTRY ADVOCACY

INDUSTRY ADVOCACY

Actively supporting industry-wide fair and responsible lending and other changes that appropriately balance the

needs of consumers and investors

56

Location Map

Employees 136

ALASKA CAMPUS

Employees 1,109

MINNESOTA CAMPUS

Employees 1,794

DES MOINES CAMPUS

Employees 902

MARYLAND CAMPUS

Employees 628

MILWAUKEE  CAMPUS

Employees  1,384

CAROLINA CAMPUS

Employees 685

CALIFORNIA CAMPUS

Employee data as of June 30, 2007, and does not include temporary or outsource personnel.

57

Seasoned Servicing Operations

Seasoned management team with average of 20 years industry experience

“One Call, One Touch”

philosophy

–

Use centralized, toll-free number

–

Route calls geographically through 7 regional call centers to first available

representatives

–

Decrease service delays by rerouting calls during high demand periods

Effectively use flexible capacity model

–

Use activity level productivity drivers to calculate staffing needs

–

Support strategic and opportunistic growth by staffing 90 days in advance of volume

projections

–

Outsource support for peak volumes and capacity shifts

Maintain 20% excess space to enable easy expansion

Constantly re-evaluate staffing programs employing contingency planning

58

Subprime Collection Process Timeline*

Early Stage 1 -

30 Days Delinquent

Outbound Dialer Attempts= Make one 

attempt on all eligible loans by the fifth 

business day after initial Mortgage

Servicing Platform (MSP) download.

Attempt every other day after until

contact is made/payment  is received.

Late Stage 31+ Days Delinquent

•

Outbound Dialer Attempts= Attempts 

every other day on all eligible loans until 

contact is made/payment is received.

•

Focus on workout and loss prevention

options

1

1

Day 7

Credit Reporting

for all Loans  

(7th day of the

following month).

Skip Tracing

FDS~ Every Wednesday

Lexis, Default Link, Universal,

Equinox ~ First business day

after standard LC date

50

60

75

90

120

150+

30

Day 5

Fresh upload of new

loans boarded,

scheduled for

Welcome Calls

Day 2

Collection calls begin

2nd business day

Initial call and

frequency throughout

the month based on

risk and prior payment

history (EI/ RP).

Days 15 & 22

15th

&  22nd

Day

Letters sent  on the

15th & 22nd

day of

the month.

Day 45

BIP information   

letter sent out 

advising  ‘how to

avoid FC’.

Day 91

Referred to Foreclosure by

day 91~ Foreclosure

Referral Automated process

begins on Demands sent at 32

day. All eligible loans with no

pending promises/

10

15

20

40

Welcome Calls

Collection Calls

10

20

Pre-Delinquency

Welcome Calls occur 5 days or

more prior to first  payment due

date. Establish positive, payment

pattern, and to correct any new

loan boarding data issues, sell

Automated Mortgage Payment

(AMP).

Day 32

Send Nonprime

Demand Letters

Letter Strategy

•

5 day letter (5th

day after due date)

•

15 day letter (15th

of the month)

•

22 day letter (22nd of the month)

•

30 day Demand/Acceleration letter

(32nd

day of delinquency)

•

45 day borrower information (BIP) letter

Steps

to Success

Day 25

Property

Inspections

ordered.

*This is an indicative timeline of the collection process for subprime mortgage loans.  The timing of the actual

collection process may differ from what is set forth herein.

59

Innovative Loss Mitigation Strategies

All

Loss

Mitigation

Strategies

are

subject

to

individual

investor

contracts.

Increased Delegated Authority

Increased Delegated Authority

Leverage investor relationships to expand delegated

authority

Automated Programs

Automated Programs

Speed approval process for the borrower, while ensuring

compliance to investor requirements

Modification Options

Modification Options

Offer traditional fixed-rate and ARM-to-fixed options

Trial Modification

Trial Modification

Collect payments for 3 consecutive months prior to modification

completion

Extended Repayment Plans

Extended Repayment Plans

Allow borrower more time to repay arrearages

Extended Loan Terms

Extended Loan Terms

Consider terms up to 40 years to create affordable payments,

capitalize arrearages and spread delinquency over longer time

Step Rate

Step Rate

Temporary reduction in rate to reduce payment for specific term

Pre-Foreclosure Sale

Accept payoff less than total amount due; in some cases,

provides time to market property

60

At-Risk Customers Solutions Align with Consumer

Financial Circumstances

Refinance

Refinance

A new lien on the property with no change in ownership.

Repayment Plan

Repayment Plan

Distribute delinquent payments over period of time, usually no more

than 12 months. Monthly amount added to usual mortgage payment

Modification

Modification

Adds past-due interest and escrow to unpaid principal balance, which

is then reamortized over a new term.  Rate adjustments and principal

forgiveness, where allowed.

Partial Claim

Partial Claim

HUD advances a loan to repay the past-due interest and escrow

amounts.

Short Sale

Short Sale

Allows customer to sell home and use proceeds to pay mortgage –

even if market value is less than total amount owed.

Deed In Lieu

Deed In Lieu

Allows customer to transfer property to Wells Fargo, as a servicer, if

customer cannot sell home at market value.

Forbearance

Forbearance

Because of long-term implications, used in severe hardships cases.

61

Helping ARM Reset Customers

Proactive Solutions

Proactive Solutions

Analyze trends to predict behavior;  segment

customers into groups likely to refinance, modify or liquidate

Proactive Communication

Proactive Communication

Contact customers based on unique

needs

–

Months in advance, call and send letters to customers likely to

experience difficulty with payment

–

Periodic statement messaging indicating ARM will reset

–

Continue to send official notice to all customers 45 days

in advance of ARM reset

–

Provide e-mail ARM alerts

Dedicated Specialists & Efficient Call Routing   Specialized ARM reset

Dedicated Specialists & Efficient Call Routing   Specialized ARM reset

assistance

–

Dedicated toll-free telephone number 1-866-398-7556

–

Incoming ARM customer call identified and routed to experts

–

Refinance eligible customers transferred to sales person

–

Non refinance-eligible customers consulted on loan workout

options

Credit Management Education   Unique Steps to Success

Credit Management Education   Unique Steps to Success

SM

Program,

Hands

on

Banking

and

access

to

national

and

local

credit

counselors

CUSTOMER LETTER EXCERPT

CUSTOMER LETTER EXCERPT

SM

62

2008 Challenges

Investor contract servicing guidelines

Negative equity in home collateral and lack of surplus

Housing Price Index

Housing inventories

–

Rise in real-estate owned (REO) properties

–

73% of subprime ARMs scheduled to reset by end of 2009

Savings rates and rising consumer debt

63

Housing Price Index

Home prices began stagnating in late 2006, early 2007.

Overall negative year-

over-year and 6 Month adjustment since Q3-2007.

US Average HPI Since 2000

By Quarters

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

0

50

100

150

200

250

300

350

400

450

Compared to 1 Yr Ago

Compared to 6 Mths Ago

HPI

Source: Economy.com October 2007

64

Housing Inventory

Since 2005, housing inventory increased by 94%.

Since beginning of 2007 has increased by 17%.

Source:  Economy.com October 2007

US Existing Housing Inventory

By Quarters

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Inventory

94% Increase

since 2005Q1

65

Housing Inventory

US Average Months of Housing Supply

-

2.00

4.00

6.00

8.00

10.00

12.00

Number of Months

179% increase

since 2005Q1

Continued pressure on home prices by coupling increases of housing

inventory with increases in months to turn existing inventory.

Source:  Economy.com October 2007

66

Savings Rate

•

Ratio of individual’s

income to total outlays.

Ratio < 0

indicates

propensity to spend above

one’s means through

credit products or dilution

of real property equity.

•

2005 and 2006 was 2

nd

and 3

rd

time since metric

began being tracked in

1952, that national

savings rate fell negative.

Source:  US Bureau of Economic Analysis November 2007

US Yearly Personal Savings Rate

-6.00

-4.00

-2.00

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

Personal saving as a percentage of DPI, FFAs

67

Core Based Statistical Area

•

Number of CBSA’s with

house price declines has

increased from 2.25% at

beginning of 2006 to more

than 20% in Sept. 2007.

•

Markets facing greatest

decline in yearly home

price depreciation

concentrated in CA, FL, NV

and AZ, representing 61%

of markets experiencing

any depreciation and 96%

of markets where 

depreciation is at least

10%.

Source: MRAC September 2007

Percentage of CBSA's

in Decline by Quarter

Since January 2006

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Percent Dcln

> 10% Y/Y

Percent Dcln

Y/Y

68

Conclusion (Servicing)

Wells Fargo is uniquely positioned to succeed.

We are committed to lifetime relationships with customers.

We are committed to building and sustaining relationships with

investors.

We constantly work with all participants in the housing finance

industry to find ways to expand and preserve homeownership.

We live by –

and advocate that all mortgage providers live by –

responsible lending and servicing principles that discourage

questionable practices.

69

WFHM Reverse Mortgages

70

Reverse Mortgages

Home Equity Conversion Mortgage (HECM)

Offering HECM program since its inception in 1989.

#1 Originator -

1 out of every 5 HECM endorsements was originated by WFHM in 2007.

#2 Servicer of  HECM loans-

Dec 2007 –

$8.9 Billion in UPB

750 Certified Reverse Mortgage Consultants Dec 31, 2007

$8B forecasted volume in 2008

Proprietary Jumbo Reverse -

“Flexible Retirement”

May 2008 implementation –

$650MM forecasted volume in 2008

Principal Limits developed in conjunction with Milliman Consulting

Key product features

–

Home values up to $10MM

–

Minimum age 62

–

Margins of 350bps or 210bps

–

6-mo LIBOR index , 1-mo LIBOR Index

–

8% lifetime rate cap

–

Equity Reserve feature –

borrowers can voluntarily reduce Principal Limit; reduces crossover risk and increases

likelihood of equity upon loan payoff.

71

Reverse Mortgages

Flexible Retirement –

Wells Fargo is the first lender to establish policies surrounding declining

home values and Tax and Insurance defaults.

Collateral Valuation

At Risk Market policy –

targeted reduction of Principal Limits in MSAs with large forecasted home

value depreciation.

AVM required in any MSA with declining home values

Enhanced appraisal review process when value >$1.5MM, full 2nd appraisal when >$2MM

Tax & Insurance Default Mitigation

Capacity testing (DTI, Assets, Debt Retirement) required when All Cash Draw selected

Borrowers with bankruptcy in last 5 years due to financial mismanagement are ineligible

Mandatory LOC set aside for borrowers in foreclosure, T&I is delinquent, or in bankruptcy

Optional T&I reserve available to all borrowers