Mr. Cooper acquires Home Point for $324M

The nation’s largest non-bank servicer of residential mortgage loans just completed its second major acquisition in a month.

Coppell-based Mr. Cooper bought Michigan-based Home Point Capital for $324 million and will assume $500 million of the company’s outstanding debt, due in February 2026, the Dallas Morning News reported. The deal follows Mr. Cooper’s purchase of Rushmore Loan Management Services’ residential mortgage servicing platform in April.

The mortgage servicer giant, led by CEO Jay Bray, is aiming to expand its capital while trimming its workforce, as the company laid off 800 people in November. Mr. Cooper will move Home Point’s 301,000 customers to its portfolio.

“This acquisition is consistent with our strategy of growing our customer base, deploying our capital with a focus on attractive risk-adjusted returns, and maintaining a very strong balance sheet,” Bray said. “Home Point has amassed an impressive servicing portfolio, consisting of conventional loans to borrowers with high FICO scores, low coupons and strong equity cushions.”

Mr. Cooper’s profits dropped significantly in the first quarter of 2023, netting $37 million, compared to $658 million one year prior. Loan servicers, brokerage firms and other real estate players across the country have endured struggles to start the year, as high interest rates, banking fallouts and fears of a recession pummel the industry. 

Home Point, the third-largest wholesale lender based on origination volume last year, saw its customer base shrink from 442,000 at the end of 2021 to 317,000 by the end of 2022, the outlet said. The Willie Newman-led company reported a loss of over $220 million last year.

There’s been an increase of mergers and acquisitions in the mortgage industry since last year amid low demand for home loans and leadership changes, according to a report from mortgage industry analyst Stratmor Group.

—Quinn Donoghue