It was the billion-dollar company that most Ann Arborites had never heard of.
With offices on Green and Old Earhart roads, Home Point Financial was the country’s third-largest wholesale mortgage lender, with an estimated 4,000 employees and 8,500 brokers selling its mortgages. An initial public offering in January 2021 valued the company at $1.6 billion.
But those were the halcyon days of low interest rates and clamoring homebuyers. Last year, the average thirty-year mortgage rate doubled, to 6.6 percent. That’s slammed the brakes on both home sales and refinancing—and refis have been most of Home Point’s business.
Last summer, Home Point notified the state that it would lay off 217 people assigned to the Ann Arbor offices, and NationalMortgageNews.com reported another round of layoffs in February. HousingWire.com recently estimated that Home Point’s staff is down to 830 people nationwide.
In an email, PR director Brad Pettiford confirms the recent layoffs “[a]s we continue to be proactive in positioning our company to ultimately thrive despite the competitive marketplace and challenging mortgage rate environment.” In a March call with stock analysts, Home Point president and CEO Willie Newman acknowledged “multiple headwinds, including higher interest rates, low housing supply, and significant overcapacity.” But he predicted that “the first quarter of 2023 will likely be the low point in the current [mortgage] origination cycle” and that the company will be operationally profitable in the second quarter.
Argus Research CCO and senior analyst Kevin Heal notes that last year, new mortgages fell from “$4.1 billion in the third quarter [to] $1.7 billion in the fourth quarter … While they’re hoping for further gains in the spring market, it’s not like they’re going to jump back up to $10 billion or $15 billion.
“Their expenses are still high, and they’re now open to a sale. But who’s going to come in?” Home Point’s stock, once $12 a share, was trading at $2.55 as the Observer went to press.