Wholesale giant announces pricing bonus for borrowers in underserved zip codes
The nation’s third-largest wholesale lender is out to capture market share amid a rising mortgage-rate environment with a new pricing bonus.
Homepoint has slashed the price of its conforming conventional loans by 75 basis points (bps) for homebuyers in specified zip codes in 20 states: Alabama, Connecticut, Georgia, Iowa, Illinois, Indiana, Kansas, Kentucky, Massachusetts, Maryland, Michigan, Minnesota, Missouri, Nebraska, New York, Ohio, Oklahoma, Pennsylvania, Texas, and Virginia. According to Homepoint, these zip codes have a high percentage of loans originated to people below the Area Median Income (AMI).
The initiative, according to Phil Shoemaker, president of originations at Homepoint, aims to enhance affordability in underserved communities and increase consumer awareness of the benefit of working with independent mortgage brokers.
“Our goal is to enhance access to affordable homeownership by opening more consumers’ eyes to the savings that are available when working with a mortgage broker,” Shoemaker said. “Brokers increase accessibility to affordable homeownership no matter where interest rates are because of choice. Brokers can choose a lender that best serves their customers’ individual needs instead of being limited to one lender that may not be the best option. This 75bps pricing bonus amplifies that broker advantage.”
The 75bps pricing incentive is available, at no additional cost, to borrowers getting a loan through Homepoint-approved brokers.
The move comes amid reports that independent mortgage banks (IMBs) saw dismal second-quarter earnings. According to the Mortgage Bankers Association, IMBs and mortgage subsidiaries of chartered banks reported a net loss of $82 on each loan they originated in Q2 2022 – down from a gain of $223 per loan in the previous quarter.
“The second quarter of 2022 did not yield the usual spring seasonal pick-up in purchase activity, in an environment of higher mortgage rates, low housing inventory, and affordability challenges,” said Marina Walsh, CMB, MBA’s vice president of industry analysis. “With lower volume, lower revenues, and higher costs relative to the first quarter, the average pre-tax net production income per loan reached its lowest level since the fourth quarter of 2018.”
Homepoint’s rival, United Wholesale Mortgage, dropped its rates by 50-100bps across all loan types to attract new brokers to join the wholesale channel.