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United States securities and exchange commission logo
December 3, 2020
William A. Newman
Chief Executive Officer
Home Point Capital Inc.
2211 Old Earhart Road, Suite 250
Ann Arbor, MI 48105
Re: Home Point Capital
Inc.
Draft Registration
Statement on Form S-1
Submitted November
6, 2020
CIK No. 0001830197
Dear Mr. Newman :
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1 Submitted November 6, 2020
Industry and Market Data, page iii
1. We note references to
third-party information and industry research throughout the
prospectus, beginning
with your reference to Inside Mortgage Finance on page iii. Please
advise us as to whether
any of these reports were commissioned or prepared for this
filing. If any of these
reports were prepared for use in connection with this registration
statement, please file
a consent acknowledging the use of the information in the
prospectus.
Company Overview, page 1
2. Please briefly explain
the term Wholesale lender the first time you use it, in order to
William A. Newman
FirstName
Home PointLastNameWilliam A. Newman
Capital Inc.
Comapany3,
December NameHome
2020 Point Capital Inc.
December
Page 2 3, 2020 Page 2
FirstName LastName
distinguish that business from other forms of mortgage origination.
Clarify your
disclosure that you are "the third largest wholesale lender by
origination volume in 2020
through June 30" by explaining the relationship between the wholesale
channel and other
forms of residential loan origination. Also, please clarify the
distinction between your
wholesale channel and the overall wholesale channel.
3. Please substantiate that you are currently the third largest and
fastest growing wholesale
lender as of June 30, 2020.
4. We note statements throughout the summary regarding your plans and
expectations for
continued growth. Please discuss in greater detail any additional
funding needs you will
have to drive this growth, where you expect to source the funding, and
the time frame and
any material milestones.
5. Please provide support for the statement on page 16 that the wholesale
channel is
fragmented below the top three participants. Explain why you believe
that this creates
substantial opportunity to gain market share.
6. Please provide more detail regarding the reasons that you believe that
growth in the
company's platforms implies that they are scalable. Balance disclosure
regarding
scalability by referencing factors that would inhibit scalability,
such as the considerations
that appear in the risk factor on page 31.
Risk Factors, page 27
7. In the risk factor that discusses financing arrangements, please
disclose the number of
warehouse lenders on which your business relies, as well as the number
of funding
facilities that expire in 2021 and the terms of the uncommitted
facilities. Explain your
plans, if any, to replace the expiring facilities.
8. Please expand the risk factor on page 52 to state explicitly the risks
associated with a
falling interest rate environment. We note in this regard the
disclosure on page 75 of the
impact of changes in interest rates on your business.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
73
9. Please expand your discussion of the proprietary Home Ownership
Platform to explain
how the platform differs from those of your competitors and what
aspects of the platform
cause increased customer retention. Quantify the impact of the
platform on customer
retention and disclose the time period over which such retention has
occurred.
10. Please disclose here the number of loans enrolled in forbearance plans
and the percentage
of loans in your total serving portfolio this represents. Please
continue to update this and
your related liquidity disclosure as of the most recent practicable
date.
William A. Newman
Home Point Capital Inc.
December 3, 2020
Page 3
Business, page 91
11. Please discuss how your highly componentized, flexible technology
infrastructure allows
you to "leverage nimble internal development teams and market leading
third-party
systems to provide a best-in-class experience for our partners and
customers." To the
extent that you believe that this infrastructure distinguishes you from
your competitors,
explain why.
12. Please expand your discussion of your broker partners on page 95 to
explain the
relationship between those partners and the company, particularly whether
the company
retains any liability for the actions of the brokers.
Description of Capital Stock, page 130
13. Please clarify, here or in a risk factor, that the distribution of any of
the convertible
preferred stock the board will be authorized to issue could be dilutive
to stockholders.
Exclusive Forum, page 135
14. You state that the exclusive forum provision will not apply to claims
under the federal
securities law. Please confirm that this will be explicitly stated in
your certificate of
incorporation or, alternatively, tell us how you plan in future filings
to make investors
aware that the provision is not applicable to these claims.
General
15. Please provide us with copies of all written communications, as defined
in Rule 405 under
the Securities Act, that you, or anyone authorized to do so on your
behalf, have presented
or expect to present to potential investors in reliance on Section 5(d)
of the Securities Act,
whether or not you retained, or intend to retain, copies of those
communications. Please
contact Julia Griffith at 202-551-3267 to discuss how to submit the
materials, if any, to us
for our review.
You may contact William Schroeder at 202-551-3294 or Amit Pande at
202-551-3423 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Julia Griffith at 202-551-3267 or J. Nolan McWilliams at 202-551-3217
with any other
questions.
Sincerely,
FirstName LastNameWilliam A. Newman
Division of
Corporation Finance
Comapany NameHome Point Capital Inc.
Office of Finance
December 3, 2020 Page 3
cc: Joe Kauffman
FirstName LastName