Wells Fargo Chairman Richard Kovacevich said Wednesday the U.S. mortgage industry will recover following further short-term pain, led by better-diversified lenders less exposed to market vagaries.
Kovacevich said current market turmoil may have a "way to go," boosting the premiums that investors demand to take on perceived credit risk.
"We have been waiting for war, pestilence and famine, and it looks like it has arrived," Kovacevich said at a Bank of America conference in San Francisco monitored by Webcast.
But he said prices on many securities have improved, and that once the market settles down, mortgage lenders will resume making home loans that many investors now won't buy.
San Francisco-based Wells Fargo , the nation's fifth-largest bank and second-largest mortgage lender, has largely escaped troubles afflicting rivals such as the largest mortgage lender, Countrywide Financial.
The bank in not overdependent on capital markets for funding, and never made many of the exotic loans that have led to rising defaults and spooked investors.