The Loan Store, the Tucson, Arizona-based lender in the process of acquiring Homepoint's wholesale business, is now offering a "buy before you sell" product in conjunction with HomeLight.
This offering will be available to the Loan Store's mortgage brokers and non-delegated correspondent clients for conventional loans only.
Homepoint did not have a "buy before you sell" product on its menu, but was getting one ready to launch before deciding to sell to the Loan Store.
"We're pushing wholesale loan originators even more to the forefront with this buy before you sell product, giving them a tool that makes it much easier for homebuyers to secure the home they want in this hypercompetitive purchase market," said Brandon Stein, president of The Loan Store, in a press release.
With this product, the consumer is able to use the equity in their current home in order to fund the down payment on their next one.
An existing homeowner gets an assessment and then uses it when shopping either as a traditional pre-approval or as the basis for an all-cash offer approval.
When the buyer closes on their next home, the previous residence is listed for sale within the next 10 days. If it doesn't sell within 90 days, HomeLight will purchase the property at the guaranteed offer price.
Home Point Capital announced on April 7 that it was retrenching its operations to concentrate on managing the mortgage servicing rights it owns by selling its wholesale assets to The Loan Store. As a result, the company filed a WARN Act notice on April 11 with Michigan authorities disclosing it was terminating 113 positions, starting immediately.
The Loan Store is offering this in seven states at first: Arizona, California, Colorado, Florida, Georgia, Oregon, Texas, and Washington, with plans to expand it to others.
HomeLight participates with "many mortgage lenders and wholesalers" in "buy before you sell" partnerships across the country. "We're excited about this transaction, as it enables our agent partners to work with the lender of their choice across the country," said its head of growth, Nick Friedman.
These partnerships allow real estate agents and their clients to work together with a lender they trust, he continued.
In 2019, HomeLight acquired Eave, which has since been rebranded as HomeLight Home Loans.
"HomeLight Home Loans works in tandem with our lender partners," said Friedman. "HomeLight provides the unique lending solution that enables a client to buy before they sell by unlocking a portion of their existing equity while enabling our lender partners to provide the long-term mortgage."
HomeLight participates in a segment of the home flipping business referred to as iBuying, a market that has been through its own troubles.
Misjudging property valuations helped to push Zillow and Redfin out of this business line. Another participant, Opendoor, has seen its share of financial troubles. Reali also exited business.
Another buy before you sell company, Flyhomes, laid off 20% of its staff last July. That followed Orchard and UpEquity reduced their staffs the previous month.
