Wells Fargo (WFC) reduced the value of its mortgage servicing rights by $214 million in the first quarter on higher projected loss-mitigation and foreclosure costs. The MSR results for the quarter netted $379 million while the ratio to total loans serviced for others fell to 92 basis points, Chief Financial Officer Timothy Sloan said in a conference call with investors. Fees dropped across the bank's mortgage department. Wells Fargo experienced a $741 million decrease in mortgage banking fees on a $44 billion decline in originations. Sloan said this reflected higher mortgage rates. "It is important to note that factoring in servicing and foreclosure costs in our MSR value is not new for Wells Fargo," he said. "We reduced the value of MSR by over $1 billion in 2009 and $1 billion in 2010 as servicing and foreclosure costs rose." But costs could be going even higher. Recent consent orders from the Office of the Comptroller of the Currency and the Federal Reserve set new loss-mitigation requirements for the 10 largest mortgage servicers. JPMorgan Chase (JPM) said the consent orders signed a week ago caused it to reduce the value of its MSRs by $1.2 billion in the first quarter. Wells began implementing the new requirements last year. The bank adopted a single point of contact for delinquent borrowers last summer and developed a uniform affidavit to be used in each judicial foreclosure state in the fourth quarter. Wells currently has a residential mortgage servicing portfolio valued at $1.8 trillion. The delinquency and foreclosure rate on these loans reached 7.22% in the first quarter, down from 8.96% at its peak in the fourth quarter of 2009. "Wells Fargo is committed to complete compliance with our regulators’ consent orders," CEO John Stumpf said. "We support the development of national servicing standards that will provide greater clarity for servicers, investors and customers." Write to Jon Prior. Follow him on Twitter @JonAPrior.