Wells Fargo CEO expects more housing market stress

BOSTON (Reuters) - Wells Fargo & Co (WFC.N: Quote, Profile, Research, Stock Buzz), the second-largest U.S. mortgage lender, said on Wednesday that it was too soon to say the nation's housing crisis has turned a corner, despite some recent signs of improvement.

"The stress continues, and we are not through this yet," Chief Executive John Stumpf said at a banking conference in New York in response to a question about trends in mortgage delinquencies.

While some economists are suggesting the U.S. economy's downturn may be brief and that first quarter gross domestic product expanded modestly, Stumpf said some signs of improvement in the hard-hit housing markets might stem from seasonal factors.

Home buying tends to pick up in the spring, when people are more likely to move.

Stumpf said the government's roughly $168 billion fiscal stimulus package, which includes tax rebate checks for roughly 130 million U.S. households, was a good start, but not enough to end current problems.

While delinquencies on subprime mortgages have surged for some time, industry analysts are now worried by data that show even people with good credit and prime mortgages are falling behind on their payments.

In February, roughly 2.3 percent of prime loans were 60 days overdue, the highest level in roughly a decade, according to data from FirstAmerican CoreLogic LoanPerformance.

Some analysts worry that this number could rise as Americans face a tighter job market and interest on some mortgages continues to rise despite a string of rate cuts by the Federal Reserve.

Stumpf said Wells Fargo's relatively conservative lending policies had largely kept it out of trouble and ensured for what he called a remarkably strong first quarter even as the economy weakened.