An Insider’s Look Into How Secondary Marketing Evaluates LOs

In this webinar we’ll explore the long-term financial impacts of renegotiations, extensions and fallouts, plus basic guidelines to be viewed as a professional by your secondary marketing department

HousingWire Annual Virtual Summit

Did you miss out on HousingWire Annual? We have you covered! Join us virtually on October 25 for a chance to see hand picked sessions from our in-person HousingWire Annual in Frisco. Register now for FREE!

How brokers can help today’s unique borrower

The average borrower has drastically changed throughout the years. More borrowers are self-employed, work remotely and have multiple streams of income. Learn about the tools to assist any borrower quickly and effectively.

Experts on how AI makes a difference in the mortgage process

Today’s HousingWire Daily features a roundtable discussion on “Humans versus really smart machines” and what the right mix looks like to gain efficiencies in the mortgage loan manufacturing process.

IPO / M&AMortgage

Homepoint files for IPO

Lender originated over $38 billion through the first three quarters of 2020

Correspondent and wholesale lender Homepoint is the latest mortgage company to aim for an IPO.

The Ann Arbor, Michigan-based lender filed an S-1 with the Securities and Exchanges Commission on Friday afternoon.

The company indicated in the S-1 that its price offering was $100 million, generally a placeholder for a larger offering. The company is expected to go public in the first quarter, sources told HousingWire.

In its S-1, Homepoint revealed incredible growth over the past year, driven by low interest rates that have made many executives in the industry rich in 2020.

Homepoint originated $46.3 billion in originations through its broker network in the 12 months that ended Sept. 30, 2020. It originated a total of $38 billion in loans through the first three quarters of 2020, according to the S-1. It’s a phenomenal rise for a lender that originated just $10.6 billion in 2018 and at one point had a retail operation.

The $38 billion origination figure makes Homepoint the third-largest wholesale lender in America, behind United Wholesale Mortgage and Rocket Pro TPO, and ahead of Caliber Home Loans. Overall, Home Point is the 10th largest non-bank originator in the United States.

Led by CEO Willie Newman, Homepoint has operated somewhat differently to other wholesale lenders, opting to service all of its loans.

According to the S-1, its servicing book rose to $74 billion from $48 billion in 2019, with 307,000 mortgages being serviced. Homepoint’s MSR multiple checked in at 2.6x in the first nine months of 2020, down from 3.2x during the same period in 2019, according to the disclosures. Homepoint also has a delinquency rate of 60 days-plus at 6.6%.

Though it’s best known for its wholesale channel, Homepoint also operates in the correspondent channel, purchasing loans already issued to end-borrower customers, as well as the direct channel.

Homepoint’s potential IPO won’t come as a surprise to most observers, given its backing by private equity firm Stone Point Capital.

Now is a historically great time for the industry: an estimated $4 trillion in originations in 2020, and margins sometimes well above 350 basis points. Going public now not only gives the lenders cheaper access to capital than warehouse lines of credit, it also enables the various private equity backers to enjoy a cash-out.

The lender’s Wall Street debut also would follow that of local rival UWM, the largest lender in the wholesale channel, and overall king of the hill, Rocket Companies, which went public over the summer.

UWM, led by Mat Ishbia, is expected to debut via a special acquisition company on Jan. 22 at a valuation of $16.1 billion. Caliber, which is a multichannel lender, also planned to go public but postponed its IPO following Guild Mortgage’s choppy debut.

In its S-1, Homepoint disclosed that its adjusted net income for the first three quarters of 2020 was $494.6 million. That stands in stark contrast to the prior two years, in which the lender lost money.

Just 31.7% of the mortgages Homepoint originated during the first three quarters was purchase. That’s down from 2019, when purchase comprised 54% of its mix.

Homepoint will be listed on the NASDAQ under the ticker symbol “HMPT.” Goldman Sachs, Wells Fargo, Morgan Stanley and UBS Investment Bank are acting as lead book-running managers for the proposed offering.

Leave a comment

Most Popular Articles

Fannie Mae: Mortgage rates and home prices will rise in ’22

Economists at Fannie Mae expect higher mortgage rates and home prices next year due to higher inflation, a tightening of monetary policy, and low home inventory

Oct 15, 2021 By

Latest Articles

What does it really mean to digitize the closing process?

ICE Mortgage Technology, a global provider of data, technology and market infrastructure, recently announced that Encompass eClose, its end-to-end eClose solution, is expanding its hybrid capabilities to now include full eNote and eVault functionality. In advance of that announcement, HousingWire Editor-in-Chief Sarah Wheeler had the opportunity to catch up with ICE Mortgage Technology President Joe Tyrrell to talk about what it actually means to digitize the closing process.

Oct 18, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please