Homepoint reduces its lending capacity

Home Point Financial Corp. terminated a master repurchase agreement and a securities agreement with Credit Suisse First Boston Mortgage Capital and Morgan Stanley Bankaccording to the filings with the Security and Exchange Commission.

The financing agreement closed on June 3, 2020 with a maximum aggregate borrowing capacity of $300 million, according to Home Point’s 8-K filing disclosed Tuesday.

Another SEC filing from last month showed that Home Point, the corporate entity that controls the wholesale lender Attachment point, terminated a master repurchase agreement and securities agreement with Morgan Stanley Bank. The financing agreement was also dated June 3, 2020. The agreement provided for a maximum aggregate purchase price of $325 million and committed financing of $162.5 million, SEC filings revealed. .

Both terminations were mutually agreed before its scheduled due date of February 23, 2023 for Credit Suisse and March 3, 2023 for Morgan Stanley.

Homepoint declined to comment on the line of credit terminations, but was open about shrinking its footprint as the mortgage market shrinks from around $4 trillion to around $1.6 trillion this year and 1.3 trillion dollars in 2023.

As of June 30, the company had $1.91 billion of capacity to fund loans, down from $2.72 billion in the first quarter. As of the fourth quarter of 2021, the company had $4.72 billion in credit with warehouse lenders.

Faced with a sharp drop in production, lenders reduced their lines of credit. loanDeposit, for example, cut capacity by a total of $1.5 billion in the past two months, citing “current and planned mortgage lending.” After reporting a financial loss of $223 million in the second quarter, loanDepot closed its wholesale channel.

In response to the current market headwinds, the Michigan-based lender Attachment point drastically reduced its workforce. The company has reduced its workforce by approximately 75% from summer 2021 to around 1,000 by fall 2022. Over the past year, Homepoint has sold much of its business, including the sale of its business correspondent for Planet Home Lending.

Home Point Financial ranks 14th among lenders nationwide, according to Inside Mortgage Financing. It generated $21.7 billion in mortgage volume in the first six months of 2022, including $9.1 billion in the second quarter of this year.