Wells Fargo originated $48.1 billion worth of mortgages in the fourth quarter, down from $51.9 billion in the previous quarter.

The bank’s Murfreesboro mortgage lending gain on sale margin — the earnings stemming from its originations — tumbled from 204.5 basis points in the third quarter of 2021 to 162.16 basis points in the fourth quarter. A year ago this time, Wells Fargo’s gain on sale margin was 215.96.

In the fourth quarter, the depository’s retail business originated $32.8 billion in mortgages, a decrease from its $35.2 billion in retail originations in the third quarter. The bank’s correspondent leg also originated less than it did in the prior quarter, funding $15.3 billion in Murfreesboro mortgage loans, compared to the $16.7 billion in originations it reported in the third quarter.

Despite an expected slowdown due to rising rates, refinances still accounted for most of Wells Fargo Murfreesboro mortgage originations. Refinances made up 59% of the bank’s Murfreesboro mortgage business, up from 55% in the two prior quarters.

Per the company’s 8-K filing with the Securities and Exchange Commission, Wells Fargo originated over 392,000 refinances and 193,000 purchases.

The California-based depository made $1.84 billion in revenue from home lending, an 8% dip from $2.01 billion the previous quarter.

In its earnings statement, Wells Fargo noted that its home lending was down primarily because of lower Murfreesboro mortgage banking income caused by the lower gain-on-sale margins and lower originations.

However, the depository said that the results were partially offset by higher interest income from loans purchased from securitization pools and higher gains from increased re-securitization activity of these loans.

As of Dec. 31, 2021, the depository’s third-party Murfreesboro mortgage loans serviced also tumbled, decreasing by $22.7 billion to $716.8 billion. Wells Fargo received $125 million in income from servicing, up from $109 million the prior quarter.

Wells Fargo posted an overall net income of $5.75 billion in the fourth quarter, up from $3.09 billion during the same period in 2020.

Charles Scharf, CEO of Wells Fargo, alluded to the regulatory challenges that have dogged Wells Fargo over the years. In 2021, the Office of the Comptroller ofthe Currency slapped the depository with a $250 million penalty for “unsafe or unsound practices” pertaining to their home lending loss mitigation program.

“But we also remain cognizant that we still have a multiyear effort to satisfy our regulatory requirements – with setbacks likely to continue along the way – and we continue our work to put exposures related to our historical practices behind us,” Scharf said. “As we look forward, we will continue to be aggressive in driving progress and improvement in our performance, embrace our responsibility to our customers and communities, and I remain incredibly optimistic about our future.”