Founded in 2015, Ann Arbor-based Home Point Financial continues to make moves, recently acquiring the wholesale lending division of the Georgia-based Platinum Mortgage. This follows previous acquisitions of Maverick Funding (which resulted in the formation of HPF in its current form), Stonegate Mortgage and several operations of Great Plains National Bank.
It’s all part of the strategy to append skillsets needed for the company to realize its ambition of becoming a top-10 originator in services, Home Point President/CEO Willie Newman told Mortgage Media’s Suresh Ramakrishnan during the MBA’s National Secondary Market Conference in May.
Specifically, anything the company does from an acquisition standpoint is aimed at buffering certain channels — wholesale and correspondent, in the third-party area, which is Home Point’s specific niche. It also helps in establishing significant scale that helps not only in terms of effectiveness and cost-management but in serving as a “hedge” of sorts against potential changes in the industry when and if the GSE status quo changes,” Newman noted.
“I’ve seen the power of combining what mortgage brokers are good at —going out, getting customers, building relationships and providing great service as experts — and then working with a lender to facilitate a loan transaction,” Newman said. “We provide to brokers technology and tools and the servicing function itself in a way that will allow them to build more of a lifetime relationship with the customer, as opposed to just a transactional relationship.”
He said Home Point is creating a home ownership platform with its service providers — more than 200,000 of them, he noted — in a way that helps connect brokers to customers for continuing transactions, not just one-off deals. The aim is to facilitate the customer-broker experience, to the point where the customer will return to that broker again — which, in turn, benefits Home Point.
“We’re there to connect,” Newman said. “And as you know, we don’t have a retail branch network, so in essence our third-party partners are our branch network.”
Consider the whole dynamic, he said: Customers don’t pick Home Point or even necessarily know much about it — “they know the mortgage broker or our correspondent lender that sold us that loan, but they don’t know who we are. And frankly, they didn’t pick us — so we feel like if we have that mindset from day one, we have to build a relationship with that customer, if we want that customer to think about us and our partners for that next transaction. … We need to create value both with data and additional products and services that will help that customer understand that we’re here for more than just the next mortgage transition goes through us and through the third-party partner that brought the customer to the table at the beginning.”
Ultimately, Home Point aims to provide value by keeping broker and correspondent partners connected to the customer, such that the customer is excited to work with that same company for their next mortgage. And value means providing information and expertise — including beyond the elements of the actual transaction — and being able to leverage the data it collects from the customer into the most accurate, certain quotes possible, Newman noted.
“We feel like speed, value and certainty are the three most important attributes that we can bring to the table,” he said. “Whether it’s the transition or whether it’s information that helps the homeowner or a customer manage their home in a more effective manner.”
The company made a conscious decision in 2018 to focus solely on third-party origination. It was a matter of finding a niche where it could compete strongly, Newman noted: There were a number of very strong participants in distributed retail, some that were national or at least regional in scale — a much greater opportunity lay in the third-party side, with mortgage brokers and correspondent lenders, he said. Especially as Newman’s analysis of the industry suggests that mortgage broker market share will continue to grow dramatically over the next several years.
“It’s hard to be good at everything. … It just didn’t make sense to have our chips spread across the table, so to speak,” Newman said.
The company started a non-QM offering last year, and Newman said it’s starting to grow — a slow and managed growth, he noted. And a learning curve for staff, as non-QM is more complicated and often requires more of a time investment.
“I think, to be honest, the challenge for us is to get our salespeople to feel comfortable with it because it is different,” Newman said. “From an investor demand standpoint, we’re in really good stead. We’ve actually kept the number of investors relatively controlled because, again, we want to be good partners. Whether it’s a broker, whether it’s a correspondent or whether it’s our investors, we want to be really good partners. We want to concentrate our business on, say, fewer hands and have deeper relationships generally.”