Homepoint will be outsourcing its mortgage servicing function to ServiceMac as it looks to redeploy resources to its originations business, particularly its wholesale channel.
The Ann Arbor, Michigan-based company had massive growth in its servicing portfolio in 2021, going to $125.8 billion at the end of the third quarter from $88.3 billion as of Dec. 31, 2020, according to a Securities and Exchange Commission filing.
However, last year Homepoint also made the decision to sell its Ginnie Mae MSRs. It started by disposing of an $11 billion portfolio in the third quarter, which made up 41% of that asset class at the start of that period. Even as the overall portfolio grew, the Ginnie Mae portion shrank to $17 billion as of Sept. 30, 2021 from $26.2 billion on Dec. 31, 2020.
Subservicing “allows Homepoint to continue offering the same outstanding servicing experience, while freeing up resources to accelerate enhancements to our wholesale platform," said Phil Shoemaker, the company's president of originations, in a press release. "By shifting more of our focus to wholesale, we can better support the growth of our partners and the overall wholesale channel as we transition into a purchase market."
Homepoint is not announcing fourth quarter results until Feb. 25. Of the $20.8 billion it originated in the third quarter, approximately three-quarters of that, $16.4 billion, came from wholesale, with another $3.4 billion coming from whole loan purchases in the correspondent channel. The remaining production was from direct-to-consumer.
ServiceMac was founded in 2017, and First American Financial, whose primary business is title insurance, completed its acquisition of the subservicer in the third quarter of 2021.
Those currently working in Homepoint's servicing department will have the opportunity to join ServiceMac, which is expected to begin handling the portfolio during the second quarter. The process is expected to be completed by the third quarter.
"Identifying a provider who would care for and provide continuity to both our customers and our servicing associates was a key driver in our selection process," Homepoint President and CEO Willie Newman said.
