Michigan-based wholesale lender Homepoint is the latest firm to announce that it is making five, seven and 10-year adjustable-rate mortgages available to its network of mortgage broker partners, a move designed to generate purchase business.
Earlier in November, United Wholesale Mortgage also announced a roll out of prime jumbo ARM products for its broker channel. And it is likely that other wholesale lenders will follow suite.
Homepoint on Monday said that the SOFR ARMs will adjust every six months after the initial rate expires and will feature a 1% cap at each adjustment to help minimize the rate fluctuation risk for borrowers.
The lender noted that SOFR ARMS “based on the latest industry-standard Secured Overnight Financing Rate, with an initial fixed-rate” can help borrowers better “qualify for, and afford, a home in today’s competitive market.”
“As the housing market continues to grow more purchase-heavy, we want to be on the front lines of offering mortgage brokers a greater variety of products so they can make more options available to a wider customer pool,” Phil Shoemaker, president of originations at Homepoint, said in a statement.
As non-QM lending increases in popularity, it’s a great opportunity for brokers to jump in and grow their business by offering a wider selection of loan products. So, what do brokers need to know about non-QM heading into 2022?
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Shoemaker also added that “the availability of SOFR ARM products through Homepoint allows brokers to educate people on the potential advantages of adjustable-rate mortgages and strengthens brokers’ position as the go-to experts in their communities.”
Homepoint’s ARM options will be available on conventional and agency high-balance products, with a loan-to-value ratio up to 95% and interest rates, the lender said in a statement Monday.
Recently, Home Point Capital, parent entity of Homepoint, reported its third quarter earnings, posting a net income gain of $73 million—a significant improvement from the reported $73.2 million loss posted in the second quarter.
Homepoint also recently announced that it would be winding down its Ginnie Mae loan servicing business. In early November, Homepoint revealed that its third-quarter financials were boosted by $122 million in proceeds on the sale of mortgage-servicing rights, or MSRs, for an $11 billion portfolio of single-family mortgages serviced by Ginnie Mae.
In a separate SEC filing made in September, the lender revealed that the $11 billion portfolio represented about 41% percent of Homepoint’s “total Ginnie Mae mortgage-servicing portfolio as of June 30.” The buyer for that $11 billion MSR portfolio was Freedom Mortgage Corp.