Home Point sells wholesale business to The Loan Store

Amid pricing wars in the channel and an uncertain economic outlook, Home Point announced Friday that it will sell off its wholesale business to The Loan Store, a national entity based in Tucson, Arizona. 

"Due to the tremendous effort of our associates and the support of our broker partners, we have built Homepoint from a startup to the third-largest wholesale lender," said Willie Newman, President and CEO of Homepoint. "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 Home Point shareholders."

Credit: Home Point

Home Point's president of originations, Phil Shoemaker, will take on the role of CEO of The Loan Store, with that company's current leader, Mark Lefanowicz moving to the position of executive chairman. 

Home Point will hold an equity interest in The Loan Store, which is also exclusively a wholesale lender. The deal is expected to close in the second quarter of 2023.

Home Point Capital will continue to manage its mortgage servicing rights, with the company's press release on the news stating that it expects the MSRs "to continue to generate significant returns and cash flow over time."

The company launched its IPO in January 2021 and since then — like some other newly public mortgage lenders — has struggled to retain stock value. At its launch, the stock was selling at about $11.32 per share. At close of day Thursday, it traded at $2.07.

The wholesale channel has become fiercely competitive as companies like United Wholesale Mortgage have launched pricing programs that forced Home Point and others to cut deeply into their own margins in order to win business. 

The lender eliminated hundreds of jobs last September and another 907 in the fourth quarter, initially claiming the reductions would amount to a savings of $100 million per year. But they were not enough to boost quarterly earnings. In the fourth quarter, Homepoint recorded a $36.8 million loss, with funded origination volume down nearly 60% from the prior quarter.