Home Point Capital Inc. on Thursday recorded a profit of $607 million in 2020 after losing money the year before as low interest rates spurred refinancing and purchasing activity.
The Ann Arbor-based mortgage lender shared its financial results for the first time since going public in January on the Nasdaq. The 2015-founded company’s record $62 billion in origination volume puts it behind crosstown mortgage giants Rocket Companies Inc. and United Wholesale Mortgage Holdings Corp., but Home Point is growing faster — increasing 178.5% year-over-year in 2020.
That is more than the top 35 largest lenders, according to industry publication Inside Mortgage Finance, and puts Home Point at No. 15 overall in total origination volume and No. 3 in the wholesale channel, its area of focus selling mortgages through independent brokers. No. 1 overall Rocket grew 122.5% last year, while No. 4 UWM increased its volume by 69.4%.
“Our results for the fourth quarter of 2020 capped a transformative year for Home Point Capital, driven by record performance across our originations platform in every dimension,” CEO Willie Newman said in a statement. “Our growth was primarily driven by our wholesale channel, where we doubled our market share versus 2019. This performance highlights the impact of our differentiated business model.”
Home Point made $4.45 per share last year. Its net revenue was $1.377 billion, almost six times what it collected in 2019. Expenses, however, increased 144% to $588.6 million.
The contribution margin of Home Point’s originations segment was $1.479 billion, five times 2019’s. Refinances represented 69.1% of Home Point’s 2020 mix, up from 49.4% in 2019. The remaining 30.9% came from purchases. Home Point retains the servicing for most of its loans; that segment lost $65.8 million.
To help grow its wholesale business, the lender last year added 2,287 broker partners, who now total 5,372. No. 1 wholesale lender UWM works with 12,000 brokers, and No. 2 Rocket has 10,000 partners.
Home Point’s workforce also grew to 3,500 employees nationwide. That includes 517 people in Michigan.
The company closed out the final three months of the year with $184.5 million in net income, a 10-fold increase, with its gain-on-sale margin increasing 1½ times. Origination volume totaled $23.956 billion, almost twice as much as the fourth quarter of 2019 and more than the value of all originations made last year.
The company ended the year with $281 million in available liquidity, including $165 million in cash and cash equivalents, a 113% increase. Although it entered the capital markets this year, Home Point did not actually see an influx in money to its coffers from the IPO. The offering came from private Home Point investors, but it provides the company an opportunity to tap public investors for funds in the future.
Crosstown rival Rocket, which includes its Quicken Loans LLC lending business, title insurer Amrock LLC and more, made $9.4 billion in profit last year closing $323 billion in mortgages. UWM made $3.38 billion with $182.5 billion in volume.