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Home Point Capital, parent company of Home Point Financial Corp., reported first quarter net income Thursday of $11.9 million, a more than 90% drop from the $149 million reported a year ago.
The mortgage lender’s total loan originations were also down from $29.4 billion a year ago to $12.5 billion in the first quarter.
Total revenue in the origination segment was also down to $72.8 million, compared to $346.6 million in the first quarter of 2021 and $102.9 million in the fourth quarter of 2021.
All three benchmarks are trending in the lending industry as interest rates and home prices continue to rise and push some potential borrowers out of the market.
But Willie Newman, Home Point’s president and CEO, still saw some reason for optimism.
“In the first quarter, we effectively navigated through an increasingly challenging environment. We were able to increase book value, enhance our liquidity position and reduce costs while continuing to invest in our greatest growth opportunity – expanding activity with our broker partners,” Newman said in a release. “These will continue to be our areas of focus. We strongly believe this will enable our ability to effectively navigate through the most challenging mortgage environment in years. In addition, we believe this positioning will optimize the opportunity for Home Point longer term as the efficiencies of the broker wholesale channel become more prominent.”
Company officials reported that total expenses of $136.7 million for the first quarter of 2022 improved by 39.8% versus the first quarter of 2021 and they were 10.2% lower compared to the fourth quarter of 2021.
At the same time the company also grew its broker partner numbers, reporting that it had 8,376 as of March 31, 2022, an increase of 2,353 from the end of the first quarter of 2021, and up by 364 from the end of the fourth quarter of 2021.
Officials also reported that it had 3,603 active broker partners in the first quarter of this year, an increase of 3.5% from the fourth quarter and up over 24.1% from the prior year.
During the earnings call, Newman said the company has streamlined the appraisal process and enhanced back office technology to quicken the mortgage process.
Newman said other enhancements include addressing the issue of housing supply, through the launching of Home Point New Build, a program the company is offering through a partnership with Level Capital. The program, he said, is designed to help brokers function as a one-stop shop for small to medium-sized home builders.
The company also launched Home Point Cash Compete, a cash offer program powered by Accept. Newman said the initiative is the first cash offer program available to independent loan originators and elevates their presence as a go-to resource for helping homebuyers and their real estate agents win deals against all-cash offers.
“We continue to enhance our focus and investment in the channel that we believe will win wholesale,” he said. “The data demonstrates that mortgage brokers, enabled by scaled wholesale lenders like Home Point, are better for consumers. Ultimately, this should result in market share growth in the channel.”
Last month Planet Home Lending entered into an agreement to acquire certain assets of the delegated correspondent channel of Home Point Financial.
“This strategic move is the right opportunity for Home Point at the right time, as it enables us to further streamline our organizational focus and ensures that our delegated correspondent partners are matched up with another company that shares our principles of offering great service and competitive pricing,” Newman said when the acquisition was announced.