Market Position

"If we're talking about the business two years ago, I don't think we would have imagined that our market share would be where it would be today," Sloan said during a May 1 investor conference. "We're going to continue to be focused in the business. We're going to continue to want to grow it."

In every investor presentation except one since the beginning of 2011, Wells Fargo has included an early slide listing the businesses where it holds a No. 1, No. 2 or No. 3 market position.

"I've never been a big believer of market share for market share's sake," said Ralph Cole, a senior vice president of research at Portland, Oregon-based Ferguson Wellman Inc., which manages $3.1 billion, including Wells Fargo shares. "If their underwriting standards are dropping to achieve it, that's what would worry us as investors."

Standards Maintained

There aren't signs those standards are slipping, said Cole and Lykken, as well as Clifford Rossi, a former risk manager and managing director at Citigroup Inc. who's now at the University of Maryland's Robert H. Smith School of Business, and analysts including Paul Miller at FBR Capital Markets in Arlington, Virginia. About 90 percent of Wells Fargo's originations are sold to Fannie Mae, Freddie Mac or Ginnie Mae, Mike Heid, the Des Moines, Iowa-based head of the mortgage business, said May 22.

Wells Fargo shouldn't be blamed for its dominance since it's a function of rivals' retreat and not its own actions, Pacific Investment Management Co.'s Scott Simon said May 7 at a Mortgage Bankers Association conference in New York.

"It's not Wells Fargo's fault they got so big," said Simon, the mortgage-debt head at Newport Beach, California-based Pimco. "If Wells Fargo went back to 20 percent, tried to cut themselves back more, it'd be hugely restrictive on credit."

Regulators have taken notice of the concentration. DeMarco, acting director of FHFA, the overseer of Fannie and Freddie, has said he'd like to see a more diverse mortgage market.

Origination, Servicing

"We have seen a great deal of concentration in mortgage origination and in mortgage servicing in recent years," DeMarco said May 15 at a speech in Washington. "Policymakers need to think hard about where and how regulatory requirements contribute to this growing concentration in the marketplace, and what might be done to reverse this."