Wells Fargo's (NYSE:WFC) Residential Real Estate Book Higher Quality than Bank of America (NYSE:BAC), Citigroup (NYSE:C) Says Deutsche (NYSE:DB)

Deutsche Bank (NYSE:DB) says they see Wells Fargo (NYSE:WFC) having probable risk in relationship to mortgage reform, as it could lead profits being pressured. But as to the quality of their residential real estate book, Deutsche sees them having higher quality than Bank of America (NYSE:BAC) and Citigroup (NYSE:C)

"We estimate there could be $1.5tr to $2tr of embedded loss in the U.S. related to residential real estate/home equity/CRE (and we’re more cautious on the home equity outlook than many). However, we believe WFC generally has a higher quality residential real estate book than Bank of America and Citigroup Inc., said Deutsche.

"While NPAs appeared to stabilize and commercial inflows have declined over the prior quarters, overall NPA inflows rose by 5% in 3Q, which is somewhat concerning," Deutsche added.

Charge-offs for Wells Fargo for real estate and home equity are over 50 percent of all charge-offs Wells faces.

Wells Fargo was trading at $31.09, down $0.41, or 1.29 percent, as of 12:18 PM EST. Citigroup was at $4.89, down $0.05, or 1.11 percent. Bank of America was trading at $14.29, up $0.04, or 0.28 percent.