Mortgage lender Home Point Financial, which does business as Homepoint, is poised to exit the Ginnie Mae mortgage-servicing rights market, according to its CEO and filings with the Securities and Exchange Commission.
Homepoint, in an SEC filing in early November, revealed that its third-quarter financials were boosted by $122 million earned on the sale of mortgage-servicing rights, or MSRs, for an $11 billion portfolio of single-family mortgages “serviced for the Government National Mortgage Association,” or Ginnie Mae.
In a separate SEC filing made in September, the lender revealed that the $11 billion portfolio represented about 41% percent of Homepoint’s “total Ginnie Mae mortgage-servicing portfolio as of June 30” — a percentage also confirmed by the lender’s chief financial officer, Mark Elbaum. The buyer for that $11 billion MSR portfolio, according to the September SEC filing, was Freedom Mortgage Corp.
Homepoint, the third largest nonbank wholesale lender nationally, per Fitch Ratings, posted a $73 million loss for the second quarter ended June 30. The $122 million earned on the third-quarter sale of the $11 billion Ginnie Mae MSR portfolio, however, helped to boost Homepoint and its parent, Michigan-based Home Point Capital Inc., into the black for the third quarter of this year, with the lender reporting a Q3 profit of $71 million.
“The [MSR] transaction further streamlined Home Point’s servicing operations, reduced overall portfolio delinquencies, and provided incremental liquidity which was used to reduce outstanding debt,” the company’s November SEC filing states.
Ginnie Mae backs only the securities issued against mortgages that are in turn guaranteed by the Federal Housing Administration, a go-to program for many first-time homebuyers; the Department of Veterans Affairs; the Department of Rural Housing Service; and HUD’s Office of Public and Indian Housing.
Homepoint spokesperson Brad Pettiford declined to comment on the lender’s plans for its remaining Ginnie Mae MSR holdings beyond what is in public filings.
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