Home Point Capital reports slump in net income

"Increasingly challenging environment" takes its toll

Home Point Capital reports slump in net income

Home Point Capital has seen its net earnings descend 38.3% in the first quarter to $11.9 million.

Announcing its quarterly figures, the wholesale lending giant said its earnings per share slumped to $0.08 for the period ended March 31, down from $0.14 per share in the fourth quarter and $1.07 in the first quarter of 2021.

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Home Point originated $12.6 billion of residential mortgages in Q1 2022, down 39.5% from $29.4 billion in Q4 2021. Its gain-on-sale margin was 61 basis points, a slight improvement from 58 bps in the previous quarter but down from 125 bps in the same period a year ago.

The Michigan-based lender/servicer blamed the “increasingly challenging environment” for the dip. Despite the downturn, chief executive Willie Newman said Home Point “effectively navigated” market headwinds by increasing its book value, enhancing its liquidity position, and reducing costs while expanding activity with its broker partners.

As of March 31, its broker partners increased by 364 month over month and 2,353 year over year to 8,376. Of this figure, 3,603 were active broker partners, a sequential increase of 3.5% and up 24.1% from the prior year.

The nonbank also earned $434.5 million in the first quarter by selling mortgage servicing rights into a hot secondary market – bringing its servicing portfolio to $102 billion, compared to $128.4 billion at year-end.

“These will continue to be our areas of focus,” Newman said. “We strongly believe this will enable our ability to effectively navigate through the most challenging mortgage environment in years. In addition, we believe this positioning will optimize the opportunity for Home Point longer term as the efficiencies of the broker wholesale channel become more prominent.”