UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
 CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): June 13, 2022
 

 
Home Point Capital Inc.
(Exact name of registrant as specified in its charter)
 


Delaware
001-39964
90-1116426
(State or other jurisdiction of incorporation)
(Commission File Number)
 
(IRS Employer Identification No.)

2211 Old Earhart Road, Suite 250
Ann Arbor, Michigan 48105
 (Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (888) 616-6866

 
Not applicable
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8−K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 

Soliciting material pursuant to Rule 14a−12 under the Exchange Act (17 CFR 240.14a−12)
 

Pre−commencement communications pursuant to Rule 14d−2(b) under the Exchange Act (17 CFR 240.14d−2(b))
 

Pre−commencement communications pursuant to Rule 13e−4(c) under the Exchange Act (17 CFR 240.13e− 4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading Symbol
 
Name of each exchange on which registered
Common Stock, par value $0.0000000072 per share
 
HMPT
 
The Nasdaq Stock Market LLC
(The Nasdaq Global Select Market)
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 7.01
Regulation FD Disclosure.

On June 13, 2022, representatives of Home Point Capital Inc. (the “Company”) will begin making presentations using slides containing the information attached to this Current Report on Form 8-K as Exhibit 99.1 (the “Investor Presentation”). The Company expects to use the Investor Presentation, in whole or in part, in connection with presentations to investors, analysts, and others. A copy of the Investor Presentation will be available on the “News & Events—Events & Presentations” section of the Company’s website at www.investors.homepoint.com. The Investor Presentation is incorporated by reference under this Item 7.01.

The foregoing information (including the exhibit hereto) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

Item 9.01
Financial Statements and Exhibits.
 
(d)
Exhibits.
 
Exhibit No.
 
Description
 
Investor Presentation.
104
 
The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.


Signatures
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
HOME POINT CAPITAL INC.
Date: June 13, 2022
   
 
By:
/s/ Jean Weng
 
Name:
Jean Weng
 
Title:
General Counsel and Corporate Secretary




Exhibit 99.1

 Investor Presentation  June 2022   
 

 Forward-Looking Statements  2  This presentation contains certain “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements include, but are not limited to, statements relating to the future financial performance of Home Point Capital Inc. (“we,” “our,” “us” or the “Company”), our business prospects and strategy, anticipated financial position, liquidity and capital needs, the industry in which we operate and other similar matters. Words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “could,” “would,” “will,” “may,” “can,” “continue,” “potential,” “should” and the negative of these terms or other comparable terminology often identify forward-looking statements. Forward-looking statements are not guarantees of future performance, are based upon assumptions, and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. Factors, risks, and uncertainties that could cause actual outcomes and results to be materially different from those contemplated include, among others: the effects of the COVID-19 pandemic on our business; our reliance on our financing arrangements to fund mortgage loans and otherwise operate our business; the dependence of our loan origination and servicing revenues on macroeconomic and U.S. residential real estate market conditions; the requirement to repurchase mortgage loans or indemnify investors if we breach representations and warranties; counterparty risk; the requirement to make servicing advances that can be subject to delays in recovery or may not be recoverable in certain circumstances; risks related to any subservicer; competition for mortgage assets that may limit the availability of desirable originations, acquisitions and result in reduced risk-adjusted returns; our ability to continue to grow our loan origination business or effectively manage significant increases in our loan production volume; difficult conditions or disruptions in the mortgage-backed securities (“MBS”), mortgage, real estate and financial markets; competition in the industry in which we operate; our ability to acquire loans and sell the resulting MBS in the secondary markets on favorable terms in our production activities; our ability to adapt to and implement technological changes; the effectiveness of our risk management efforts; our ability to detect misconduct and fraud; any failure to attract and retain a highly skilled workforce, including our senior executives; our ability to obtain, maintain, protect and enforce our intellectual property; any cybersecurity risks, cyber incidents and technology failures; material changes to the laws, regulations or practices applicable to reverse mortgage programs operated by the Federal Housing Administration (“FHA”) and the U.S. Department of Housing and Urban Development; our vendor relationships; our failure to deal appropriately with various issues that may give rise to reputational risk, including legal and regulatory requirements; any employment litigation and related unfavorable publicity; exposure to new risks and increased costs as a result of initiating new business activities or strategies or significantly expanding existing business activities or strategies; the impact of changes in political or economic stability or by government policies on our material vendors with operations in India; our ability to fully utilize our net operating loss (“NOL”) and other tax carryforwards; any challenge by the Internal Revenue Service of the amount, timing and/or use of our NOL carryforwards; possible changes in legislation and the effect on our ability to use the tax benefits associated with our NOL carryforwards; the impact of other changes in tax laws; the impact of interest rate fluctuations; risks associated with hedging against interest rate exposure; the impact of any prolonged economic slowdown, recession or declining real estate values; risks associated with financing our assets with borrowings; risks associated with a decrease in value of our collateral; the dependence of our operations on access to our financing arrangements, which are mostly uncommitted; risks associated with the financial and restrictive covenants included in our financing agreements; risks associated with changes in the London Inter-Bank Offered Rate reporting practices and the use of alternative reference rates; our ability to raise the debt or equity capital required to finance our assets and grow our business; risks associated with derivative financial instruments; our ability to comply with continually changing federal, state and local laws and regulations; the impact of revised rules and regulations and enforcement of existing rules and regulations by the Consumer Financial Protection Bureau; the impact of revised rules and regulations and enforcement of existing rules and regulations by state regulatory agencies; our ability to comply with the Government-Sponsored Enterprises (“GSE”), FHA, U.S. Department of Veterans Affairs (“VA”) and U.S. Department of Agriculture (“USDA”) guidelines and changes in these guidelines or GSE and Government National Mortgage Association (“Ginnie Mae”) guarantees; changes in regulations or the occurrence of other events that impact the business, operations or prospects of government agencies such as Ginnie Mae, the FHA or the VA, the USDA, or GSEs such as the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, or such changes that increase the cost of doing business with such entities; our ability to obtain and/or maintain licenses and other approvals in those jurisdictions where required to conduct our business; our ability to comply with the regulations applicable to our investment management subsidiary; the impact of private legal proceedings; risks associated with our acquisition of mortgage servicing rights; the impact of our counterparties terminating our servicing rights under which we conduct servicing activities; risks associated with higher risk loans that we service; and our ability to foreclose on our mortgage assets in a timely manner or at all. You should carefully consider the foregoing factors and the other risks and uncertainties that may affect the Company’s business, including those listed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, as such risk factors may be amended, supplemented, or superseded from time to time by other reports filed by the Company with the Securities and Exchange Commission. Many of the important factors that will determine these results are beyond our ability to control or predict. You are cautioned not to put undue reliance on any forward-looking statements, which speak only as of the date thereof. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements.  
 

   A Different, Better Kind of Mortgage Company  3  Balanced, capital-efficient business model allows for return on equity in a variety of interest rate environments  Vast experience through multiple business cycles enables proactive management to optimize the business model  Technology and process-focused strategy drives ability for further scale and efficiency, while providing highest quality experience  Platform designed to capitalize on third-party origination market with a focus on scalability and partner experience  1  2  3  4  5  “We Care” culture commitment to all our stakeholders – customers, associates, partners and shareholders 
 

           4  Home Point Capital at-a-Glance  One of the largest U.S. residential mortgage originators  Founded in 2015; completed IPO in February 2021 (Nasdaq: HMPT)  Headquartered in Ann Arbor, Michigan; funding loans in all 50 states  Primary emphasis on large third-party origination market  Differentiated business model focused on enhancing the partner experience 
 

 Home Point Capital by the Numbers  $79bnLTM Q1 2022 Funded Origination Volume2  3,600+Active Brokerage Partners in Q1 2022  5  #7Non-BankMortgage Originator1  ~8,300 Mortgage Brokerage Relationships  #3Wholesale Lender1  1 Source: Inside Mortgage Finance, as of Q4 2021. 2 Last twelve months for the period ended March 31st. First quarter 2022 LTM information is derived from a numerical calculation of our fiscal year 2021 financial information plus first quarter 2022 financial information less first quarter 2021 financial information. Home Point Capital does not prepare or present separate LTM financial statements.  
 

 Highly Experienced Leadership Team  6  Jean WengGeneral Counsel Corporate Secretary  John ForlinesChief Risk Officer  Noelle LipscombChief Audit Executive  Andrew Bon SalleChairman of the Board, Home Point Capital  Willie NewmanCEO and President  Mark ElbaumChief Financial Officer  Phil MillerChief Operating Officer  Phil ShoemakerPresident of Originations  Perry HilzendegerPresident of Servicing 
 

     Confidential  7  Unique Mission that Underpins Strategy  Human-Centered  Experiences designed to serve, empower and delight customers, partners and our associates that serve them.   Our mission is to create healthy, happy homeowners    Technology-Enabled  Technology enables personalization and connectivity at scale; and creates a more seamless and cost-efficient experience for customers and mortgage professionals    Community Driven  Community focus supports communities and our industry, helping to build a mortgage industry that is more inclusive and diverse, more prosperous, and more sustainable for all stakeholders  Our goal is to positively impact all our constituents – our customers, associates, partners and shareholders 
 

 Significant Wholesale Opportunity​    Confidential  8  Fully Committed to Wholesale  Consumer Advantage  Originator’s ability to choose creates alignment with wholesale lenders to deliver superior service, products and pricing    Brokers Outperform in a Purchase Market  Local expertise, combined with cost efficiency of wholesale lenders, positions the wholesale channel to gain share in a purchase market    Massive Addressable Market  The activation potential for current approved partner base, combined with the consumer benefit and overall wholesale market share opportunity, uniquely positions Home Point to grow sustainably  We have strategically redeployed resources to take advantage of channel's growth potential          ~16,000Overall Market Active Brokerages  ~55%Home PointApproved Brokers    ~30%Home PointActive Brokers2  ~75%Top Wholesale Originator Broker Network1    Significant Wholesale Opportunity  (1) Represents estimated broker network for the largest wholesale lender, per Inside Mortgage Finance. (2) Active defined as number of brokers with whom Home Point has completed a transaction within past 12 months. Note: Broker partner represents a brokerage business that includes multiple broker employees. (3) Source: Inside Mortgage Finance. 
 

 Mortgage brokers originating through wholesale lenders deliver:Broader access to creditAt lower expense to consumersSafely  9  Confidential  Based on our extensive review of various cohorts in HMDA data, the benefits to a consumer using a mortgage broker are material and widespread   Based on agency data, no material difference in default rates exists between retail and wholesale originated loans  As measured by loan officer counts, the wholesale broker segment continues to grow and given a level playing field should accelerate in a rising rate environment  1  2  3 
 

 Leader in Wholesale Channel  10  Efficient and Personalized Customer Experience  1  Best Workplace for Loan Officer  2  Low Fixed Cost; Significant Economies of Scale  3  Benefits of the Wholesale Channel  Advantages of Home Point’s Model  Highly Experienced Sales and Operations Team  No Channel Conflict  In-Market Sales Strategy Drives Broker Growth    1  2  3  Significantly Lower Costs to Consumers  4  Broad Product Mix; Flexible Technology Platform  4 
 

       Componentized Flexible Technology Platform  Integration of aligned third-party providers with internally developed software provides a scalable, cloud-based infrastructure with enhanced flexibility   11     We build proprietary software to create differentiationAppraisal and Underwriting PlatformsBroker Portal  We leverage industry leading core systems providersLoan Origination SystemOutsourced Servicing Platform  We utilize state of the art, low code tools to enhance functionality and efficiencyRules EngineWorkflow Engine  Flexibility to swap in and out of componentsQuickly adapt to evolving technology to drive innovative solutionsEnable broker and customer self-service  Greater control over developmentLarger available workforceLower maintenance and fixed costs  Focus on advancing data driven strategies and connectivityAvoid legacy code maintenance and tech debtAccelerate speed to market                                                                                                 
 

 2022 Corporate Plan  12  Entering the most challenging part of the mortgage cycle: higher rates, shrinking origination market.           Reduce costs  Improve liquidity  Continue to reduce origination costs and proactively manage capacityDivest of noncore operations and simplify organizationConsolidate servicing platform to a variable cost construct  Manage/divest of non-core assetsMonetize select MSR as market opportunity presentsPay down operating (MSR) debt  Redeploy segment of direct origination’s unit to support wholesale channel growth Enhance partner experience through process, technology, and product improvements  Grow active partners  1.  2.  3. 
 

   Getting in Front of the Cycle  13  Consolidating servicing platform into ServiceMac, converting a fixed cost into a lower, variable costRedeployed Direct Originations segment into wholesale, driving stronger customer retention and increased broker activation  Pending sale of investment in LongbridgeSale of select MSRs enhances both our leverage and liquidity positionsSale of correspondent channel assets reduces corporate expenses and enables reallocation of resources to wholesale  Homepoint New Build addresses housing supply issues, helping brokers function as a one-stop shop for home buildersHomepoint Cash Compete addresses increasing buy-side competition, positioning brokers as go-to source to help homebuyers and real estate agents win deals  Since mid-2021, have taken proactive approach to best position Home Point for the long-term  Platform ConsolidationsFocusing our resources on growth through the wholesale business  Divesting Non-core OperationsEnable us to navigate through industry dislocation ahead of competitors  Growth InitiativesInnovative solutions to tackle issues impacting broker partners & homebuyers 
 

       2022 Plan Q1 Progress  14  Home Point made progress on all three Q1 objectives.  Q1 2022  Q4 2021        Reduce costs  Improve liquidity  Grow active partners  1.  2.  3.    Total Expenses ($M)  $152  $137    Available Liquidity ($M)  Debt / TCE  $555  $656  1.60x  1.22x  UPB Sold ($B)  Gross Proceeds ($M)  $13  $37  $175  $435    Active Locking Partners  3,481  3,603    Increased book value (per share) from Q4 2021 of $777m ($5.57) to $783m ($5.64) in Q1 2022.  Detailed financial results, statements, filings, and company information can be obtained on the company’s investor relations website. 
 

 Confidential  15  Appendix 
 

 Borrower lifetime savings by using wholesale vs retail  16  Source: HMDA data  Middle Income   Filters AppliedLoan limit: ConformingLoan type: ConventionalLoan term: 30-yearRate type: FixedDebt-to-income: 41-45%  All Income   Low Income   CommentarySelected DTI range of 41-45% as it was the most popular bin across most categoriesUsed FFIEC definitionsLow income defined as less than $52,200; Moderate income defined as $52,200 - $156,6002020 impacted by industry wide capacity constraintsNote: Interest savings assumes full term of loan 
 

 CommentaryChanges made to processes post crisis have resulted in a convergence in performance between retail and wholesale originationsThis performance has been consistent throughout the post crisis period  Post crisis default rates are consistent between channels  17  Source: Agency data    Pre-Financial Crisis  Post-Financial Crisis 
 

 Mortgage brokers continue to grow  18  Source: Company reports  Active Brokerage LOs  Active Brokerages  Active brokerages increased 7% in 4Q21 from prior year, while active brokerage LOs increased 15%Assuming a level playing field, we expect this trend to accelerate as margin compression impacts less efficient retail lenders – Similar to 2019