Home Point investigates selling Ginnie Mae servicing rights in order to reduce debt
Home Point Capital (HMPT), due to market pricing pressures and agency fees, suffered a quarterly loss. The company also considered a partial portfolio sale to repay debt. The loss per share was $0.53. Earnings per share were $1.07 in the first quarter compared to $1.22 a Year ago. “We entered the second half of the year facing a historic pricing dislocation in wholesale, our primary origination channel. “We entered the second quarter facing a historic pricing dislocation in our primary origination channel — wholesale. Originations generated $376.6million in revenue last year with a gain-on-sale rate of 280bps. This is compared to $346.6 million in the first quarter. Newman also pointed out that $33 million in one time fees were imposed by government-sponsored entities for negatively impacting margins. “The agencies issued new pricing without protecting our pipeline, which is very unusual for what we’ve previously seen. He said that there was a kind of an incident marking down in the pipeline as a result. Homepoint’s servicing segment saw revenue of $86.1million for the quarter. This is up from $70.7million in the first quarter and $45.3million for the same period last. Homepoint’s mortgage-servicing portfolio had $124.3 billion in unpaid balances, up from $105.8 million the previous quarter and $66.9 trillion the same period last year. Leaders mentioned that some mortgage-servicing rights were on the horizon. Ginnie Mae loans which account for 20% of the company’s servicing portfolio were unloaded. “We looked at the situation and decided that we needed to be efficient and focused on our customers. We also realized that there may be larger services that could assign more value to certain assets. Newman said. “And so, that’s how we got to where we said Ginnie Mae was a good opportunity to optimize what we do operationally. The stock fell 9.1% to $4.79 after the earnings announcement. It closed the previous day at $5.27. Its value plunged further to $4.53 within the first few minutes of trading, but it had recovered to $4.71 by 12:30 pm. Home Point Capital went public earlier in the year.