Is The Loan Store a Homepoint 2.0?

It may be time to switch gears five months after wholesale operations move

Is The Loan Store a Homepoint 2.0?

It might be time to start thinking of The Loan Store as Homepoint 2.0 -- for the sake of greater competition and its success in a volatile market, a company spokesperson said.

Home Point Financial, in April, confirmed plans to sell its wholesale business to Arizona-based The Loan Store after a nine-year run as a participant in the originations market. Homepoint president and CEO Willie Newman said at the time: “After careful consideration, and in light of current market conditions, we have decided to sell our wholesale originations business to The Loan Store. We believe this is the best decision for our company to continue to deliver value to Homepoint shareholders.”

At its peak, Homepoint was the third-largest wholesale lender after perennial rivals United Wholesale Mortgage and Rocket, which fluctuate in terms of first and second place.

“Suddenly, Homepoint is gone”

“Before things slid downhill in 2023, Homepoint was the firm number three wholesale lender – well liked, considerable volume, and because of the UWM/Rocket ultimatum, Homepoint was number two for a lot of people,” Brad Pettiford, senior director-corporate communications & brand strategy, wrote to Mortgage Professional America via email. “Suddenly, Homepoint is gone.”

By one measure, United Wholesale Mortgage commanded a 48% share of the market in the second quarter  -- “the first quarter in which Homepoint was essentially non-existent,” Pettiford noted. Such command of the market as UWM enjoys is unhealthy for a robust marketplace, Pettiford suggested: “I think it can be reasonably argued that a number that high is negative and potentially endangers the wholesale channel more than anything,” he wrote.

Even though The Loan Store continues to grow and add products and state license, it might yield greater fruit to refer to TLS as the “closest thing to Homepoint for those consumers with fond memories of Homepoint,” he said.

More competition is key

Brian Cooke, vice president and mortgage advisor at SunnyHill Financial, agreed. “More competition is good for any industry,” he said. “It keeps companies putting their best foot forward in every aspect of their business.”

“We work with six different wholesales partners regularly,” Cooke said. “I don’t think many brokers want to do this, they just pick one they’re comfortable with. All the wholesalers I work with I’d say are on par with all the others’ services – technology, speed. The industry isn’t faced with the capacity restraints like we were during the refi boom.”

There is a need, he believes, for competition. “We don’t believe a company should tell another who they can chose to do business with,” Cooke said. “Let your product and your brand and your services dictate the business from your clients – the client is the broker in this case.”

He added: “But then you have other brokers who aren’t as price sensitive. And so they just go with what they know. And UWM process and technology – yeah, probably one of the best out there in the wholesale channel.”

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