The capital available in the wholesale lending channel continues to shrink.
Homepoint, the nation’s third-largest wholesale lender, has reduced its lending capacity by $925 million.
The reduction were announced by Home Point Financial Corp., which does business as Homepoint, In three separate filings with the Securities & Exchange Commission in September and October, Home Point Financial Corp.
Two of the filings announced the termination of master repurchase agreements and securities contracts, one with Credit Suisse First Boston Mortgage Capital LLC and the other with Morgan Stanley Bank N.A.
The termination of the repurchase agreement with Morgan Stanley Bank was filed on Sept. 23.
It provided for a maximum aggregate purchase price of $325 million and committed financing of $162.5 million. The parties mutually agreed to terminate the agreement before its scheduled maturity date of March 3, 2023. Home Point Financial did not incur any early termination penalties.
The termination of the repurchase agreement with Credit Suisse was filed Oct. 11. The agreement, dated as of June 3, 2020, provided for a maximum aggregate purchase price of $300 million. The parties mutually agreed to terminate it before its scheduled maturity date of Feb. 23, 2023.
In addition, in a third filing, dated Sept. 16, Home Point entered into an amendment with UBS AG for a master repurchase agreement dated Oct. 28, 2015. The amendment and ancillary agreements extended the termination date of the agreement to Sept. 15, 2023, while also decreasing “the maximum aggregate purchase price provided for under the Existing Master Repurchase Agreement from $500 million to $200 million” — a $300 million decrease.
Combined, the three filings reduce Homepoint’s lending capacity by $925 million.
A spokesman for the company said Homepoint would not comment on filings. “We cannot comment during a quiet period,” the spokesman said. “We will comment on this and other liquidity actions during our earnings call.”
The reductions follow the company saying in September that it would lay off “hundreds” of employees “across the organization” in November. An investigation by NMP determined that the number of employees being cut is more than 900.
In August, Home Point Capital reported a net loss of $44.4 million, or 32 cents per diluted share, in the second quarter, compared to net loss of $73.2 million, or 53 cents per diluted share, in the second quarter of 2021. The loss followed a profit in the first quarter,.
In June, the company announced a restructuring that would eliminate about 10% of its workforce, which at the time was estimated at about 4,000 workers.
The reductions in its lending capacity are similar to those made recently by loanDepot. The nation's second-largest retail nonbank lender has cut $1.5 billion in capacity since mid-August.
