Homepoint organizes layoffs
Homepoint experienced a round of layoffs last Friday that affected dozens of employees. However, some believe that the rightsizing measure might have been even more severe. The Ann Arbor, Michigan-based lender will report its fourth quarter earnings in a few weeks. According to an account executive, the reduction affected all departments, from senior management to sales to operations. “It’s standard for Homepoint that HR and the direct manger make individual calls, which is how we got notified and we were paid severance and only pay out PTO if required by the state,” an account executive who was affected by the layoffs said. The wholesale lender, based in Michigan, stated at the time that the right-sizing would result in a “high rate, low margin environment” and save the company more than $100 million. This round of reductions came a few weeks after Home Point Financial reported a $44million net loss in its second quarter. This was due to market factors, including competitive wholesale pricing. Home Point Financial reported a net loss in the third quarter of $93.4 million. This was despite the channel’s thin margins and the closure of other lenders in this sector. “Profitability will continue to be challenged by very severe operating conditions nonbank residential mortgage company, especially for companies in wholesale origination channel,” Gene Berman from Moody’s Investors Service said in November. He was referring to the tough economic environment for wholesale lenders. Since mid-2022, many players in the wholesale lending sector have either closed down or reduced their operations. Finance of America, Guaranteed Rate, and U.S. Bank announced that they would stop wholesale lending.