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More mortgage M&A activity today.
home point announced This morning it sold the company’s wholesale origination unit to The Loan Store, Inc. entered into a definite agreement to sell
As a result, the Ann Arbor-based mortgage lender will no longer be a direct participant in the loan origination location.
However, HomePoint will continue to manage its mortgage servicing rights (MSR) portfolio, which it expects “to generate significant returns and cash flow over time.”
Prior to this move, HomePoint was the third largest wholesale mortgage lender in the country, behind only United Wholesale Mortgage and Rocket Mortgage TPO.
HomePoint Was a Top-10 Mortgage Lender
HomePoint has seen explosive growth since its inception in 2015 through the acquisition of Maverick Funding.
It took them less than a decade to grow to a 2,000+ employee workforce and become a top-10 mortgage lender.
In 2021, the company projects an impressive $96 billion in home loans, making them the ninth overall.
However, due to tough market conditions, namely a doubling in mortgage rates, profitability became an issue, leading to a series of layoffs across the country.
Prior to this announcement, the company operated entirely in the wholesale channel through mortgage brokers, meaning they will no longer have a position in the mortgage origination business.
In the past, they also operated a correspondent and retail division before shrinking operations.
Today, HomePoint made what they felt was “the best decision for our company to continue providing value to Home Point shareholders.”
But because of the sale, “its nine-year tenure as a direct participant in the core market” will come to an end.
As noted, the company will continue to manage “its high-performing MSR portfolio.”
HomePoint is publicly traded on the Nasdaq stock exchange under the symbol Nasdaq: HMPT,
At last look, HomePoint was up about 21% on the news, although the stock is down about 33% over the past 12 months and 82% over the past five years.
The Lending Store looks to grow its mortgage footprint
Despite being established in 2019, The Loan Store, Inc. The third largest wholesale lender in the mortgage space is acquiring.
Those other two lenders, UWM and Rocket Mortgage, are the largest mortgage lenders across all origination channels.
This should allow the Tucson, Arizona-based company to grow quickly despite industry headwinds concerning high mortgage rates.
The Loan Store, Inc. Currently operates entirely through the wholesale channel, offering a variety of loan products through mortgage broker partners.
This includes conforming loans, jumbo loans, VA loans, and non-QM offers such as bank statement loans and DSCR (debt service coverage ratio) loans.
The company prides itself on “fast, easy home loans” and has financed over $10 billion since its inception.
It does not retain debt service for any mortgages that are originated.
Prior to the acquisition, The Loan Store did business in approximately two dozen states.
These include Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, New Jersey, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee Are. , Texas, Utah, Washington and Wisconsin.
The merger should allow them to expand their reach nationwide and potentially become licensed in all 50 states.
The company expects the sale to close in the second quarter of 2023, subject to customary closing conditions.
It is unclear whether any employees will be affected as a result of the agreement.
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