HMPT Home Point Capital

Gary Stein Head, IR
Willie Newman President and CEO
Mark Elbaum CFO
Don Fandetti Wells Fargo
Brock Vandervliet UBS
Doug Harter Credit Suisse
Blake Netter Morgan Stanley
Kevin Barker Piper Sandler
Rick Shane JP Morgan
Mihir Bhatia Bank of America
Call transcript
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Gary Stein

Welcome to our Third Quarter 2021 Earnings Call.

Joining me this morning are Willie Newman, President and Chief Executive Officer; and Mark Elbaum, Chief Financial Officer.

During our prepared remarks, we will be referring to a slide presentation, which is available in the Events section of the Home Point Investor Relations website.

Before we begin, I’d like to remind you this call may include forward-looking statements, which do not guarantee future events or performance. Please refer to Home Point’s most recent SEC filings, including the company’s Annual Report on Form 10-K, which was filed on March 12, 2021, for factors which could cause actual results to differ materially from these statements. certain relevant on performance in business. discussing management call, of be are believes assessing may non-GAAP this measures which the We the financial non-GAAP the company’s GAAP the earnings These which website. reconciled Home release, on in Point’s nearest available is are measures figures to Chief like and turn Newman, to now call over Officer. I’d Willie to the President Executive

Willie Newman

Gary, good morning, and everyone. Thanks,

partners. billion. for as September like total is almost origination company. insights total, relationships XX% third We nearly ended After are third During that, another our your quarter also $XXX for and challenging correspondent solid billion, Point XXXX milestone then of I’ll to quarter volume, results. third-party and third quarter From our a prepared results, ended months of a share some up I’d more XX a quarter provide which to remarks, significant will third the in quarter that I’m $XX initial more open for highlight XX, how volume our Mark last going We’ll in since take X,XXX terms adapting the an reached XX% Home by year-over-year our old we totaled which quarter. just call details funded broker and and to have operating last XXX quarter increased into then operational results evolving than environment. briefly had review partner partners our our performance. and discuss we with X-year Starting questions. with the fourth funded perspective, In our the by on

platform. wholesale opportunity shift year, earlier with point significant accelerate for has and our to noted the created previously, As in began competitive our strategic them the this attract dynamics brokers to engagement home a which I’ve channel, in

than of XXXX end quarter broker brokers partners second XXXX. We of the quarter the over more have and the the end of of added since XXX X,XXX third since

ended we customers, XX% nearly mortgage the XXX,XXX third up quarter servicing which Looking portfolio, is at our year-over-year. with

from the third balances $XXX $XXX Our total and we the or in $X.XX quarter third the We million. the per in XXXX of second bounced net reach financial income back challenging of of end revenue total a quarter generated perspective, From million of $XX by XX% grew from a quarter. portfolio share. to million

channel As may we previously, to action pricing optimize Since our scale we resulting set have pressure discussed business. a unique significant circumstances has have this when historic wholesale the change, of and aggressive predict taking in in created our a dynamic on been we dislocation, margins. cannot

we have note been continuing Some efficiency partners. to of Starting progress business, in made markets across accelerating key the and partner areas with alternative. I’m our to customer experience and and network, our our third growing of quarter. broker diversifying areas all rapidly capital these our we enhance the initiatives pleased meaningful execution targeting more productivity our include broker have during

approach, we mortgage broker experience. with use leaders this best to the of the ensuring highly relationships across cornerstones are is model sales the market, business partners able and experienced the market with of has the country. relationships brokers build of our while to end our One in customer possible acquire our Through optimize

of this they we brokerages on variety partner of rise refinancing. are mortgage to enhanced track current gain of While and more positioned share in with well target the our end refinancing. believe network. of to And our X,XXX growth And has our Purchase an well to particularly environment, require our transactions more typically model. rates customer outpace our pace, model broker us interaction are the to during differentiated standpoint, partner well year. purchase continued perform execution to we grow than are transactions suited enabled customer-friendly third to a rate we partnering than based on From we quarter, market exceed far by interest as the broker

change technology and to a best-in-class solutions third-party to new during the Point, perspective, the while the deliver personalized Amplify. infrastructure both response efficiency quarter, in channel Amplify in our of both of channel, have significant highly implementation. mortgage process progress integrating partner we service the end our this we Point we customer in this competitive addition, support forward efforts have model of satisfaction. we initiatives. innovative dynamics a have quarter, technology focused and In in process and built Home complete year. number customer optimizing to longer made by we at faster, In flexibility with made end and wholesale efficiency implementation of at progress accelerating and help brokers maximize componetized, proprietary a national the been platform the our maximize and for more flexible the that pulling From combines Home improvement introduced We Point’s in experience. rollout and locally great second and term to the And wholesale expect Home is a

quarter, of of end a loan XX% continue to we approximately drive our by were the per direct as cost closer long-term move third to target in XXXX. $XXX by result, we able cost the As during per loan to wholesale direct down loan our

to Turning servicing.

lower time, This we will platform strategy. are ability us on customer at lifetime focusing value. and the As greater enhance driving discussed to agency experience, the the quarter, centric costs last give an same

This The execution had Ginnie further our to the third which servicing billion a value we sale, been originations. portfolio, operations. level we will have quarter, shortly, $XX discuss through execution, Mark As segment creating are which us sub-scale streamline sold strong enabled we the also demonstrates where an is Mae has servicing during a servicer.

high-quality combined low with we As quarter, noted we improved to returns. factors, very with are build prepayment a last continued delinquencies. These slowing rates servicing driving portfolio

our wanted I markets out efforts successful and diversify Finally, capital call to ongoing alternatives. execution to

our trading $X sales in billion enhancing notable towards into execution, products third agency the including our deliveries non-agency cash quarter, MBS During to steps accelerating nearly and several execution. transition we versus took

third quarter helped results that to actions risk. Our revenues execution have demonstrate enhance and both these reduce

entirely a non successfully securitization owner-occupied point of week, post can loans In addition, originated private last closed. just home

As intently our current competitive focused remain we business and the elements within our plan control. to navigate on executing market and continue those environment, through managing we

the are our We on to I’d to call model least return strengths flexible Mark. the on at to XX%. of turn business towards building baseline over of Point like a to Home With that, continue equity drive

Mark Elbaum

the morning, good financial like as third outlook. everyone. results presentation. spend a our discussing few as our of Thanks, Slide with the to Willy, well and of Starting XXXX, for financial minutes I’d quarter earnings X

challenging during our third across the continued key we encountered to noted, notwithstanding servicing deliver strong the environment, and quarter, Willie performance origination we metrics. As some of

X. to Turning Slide

results the third of million We and in quarter for have of third million second the total quarter XXXX $XXX of $XXX revenue of a The $XX financial in XXXX. quarter XXXX. provided with summary in million third of quarter the our the compared

total Loan the in the the The enhance million decline contribution servicing XXXX $XX of in and increase to last origination compared expenses, a the in we origination our servicing was the quarter partner $XX XXXX segment’s of provided XX have X, included includes slightly snapshot we which held relationships activity of the the and concerted second the $XXX of segment sale The as our snapshot third our ago of as as in quarter, XXX driven $XX ago scale throughout origination of based $XX over the decline quarter versus from nearly third persisted the a of quarter with September expenses million new quarter relationships revenue in but XXXX efficiency in compared XXXX, quarter sequential year origination portfolio giving XXXX, margin the of of moment. the was the of quarter at was year-over-year the $XX quarter. that the over Originations reached total were of Consistent were were in year million decreased back points expenses last $XXX for of income $XX UPB, to On in was X% segment of during at quarter, a to last third quarter the sale effort and versus which a portfolio quarter XX expenses quarter Mae been XXXX. corporate servicing our flat. is on includes this segment a year-over-year the the quarter. results. doubled quarter. flat the second At and is strategy, activity quarter year volume our in our of months have decline which third second quarter I third in XX of $XXX last XXXX. segment a quarters. to of third the nature which and driver $XXX $XXX million Slide X third quarter cost results. up third our million grew during due We compared fair million approximately servicing generated down sequential relationships decline to basis contribution number saw the sale in the MSR X,XXX, which compressed quarter, net we third origination up we Our billion of $XXX have of from $XXX third second of customers a in XXXX in the million funded XX% margin slowdown billion XX% net second million was million positive XX. servicing basis to third in capital-intensive overall in of to end the our quarter, alternatives. environment X, the of XX% a of year-over-year in of quarter XXXX quarter in for segment million represents third the aggregate, X% correspondent million channel of financial expenses versus $XX XXXX. discuss capital we execution and will XXXX. period, capital for described end the million XXXX negative the result the quarter by XX% volume of the on a X,XXX which generated of the and almost of end a direct wholesale diversify the the this of quarter in fees initiatives. volume in from to primary Ginnie The of X% The in the ago total by our ended from before channel Similar Slide was our third the markets on second and the last third-party second quarter to to XXX Gain up an the In of X quarter, making The basis the the breakdown of expenses of change impact of of reflective firm-wide the of XXXX, while compared year this compared XXX,XXX in XX% X% increased savings of our the quarter prior Slide XXXX, quarter portfolio, the second amortization of correspondent quarterly the $XX On quarter XXXX of margin prepayments or in net and of nearly well the direct decrease we channel points from new quarter growth quarter second by quarter nearly markets of loss billion income the points for while and from XX margin XXXX the which servicing servicing driven and activity million in XXXX. related of net our nearly the in a grew quarter net and third portfolio value $XXX by effect of reflective channels XXXX. Gain the attributable of Willie quarter. to

ago of which the net MSR generated value $X from asset impact million, the hedging, $XX adjusted we refer the margin, $XX Servicing of our million as margin in positive $XX contribution to a segment an the segment prior negative the quarter including negative year $XX quarter negative a prior year what quarter the for the quarter. to in million mark-to-market up was Before compared $XX was negative of in quarter. and ago third fair servicing contribution positive million, and which million the in million

net $XX mark-to-market hedge asset, a of fair increase margin due increase from million in value, rates to Our the benefited interest quarter. third in quarter during primarily the of contribution our MSR an

June loans we of of billion, aggregate quarter, completed of approximately single-family for Ginnie the which rights and Ginnie a the in XX. the within of gain portfolio approximately Mae The total the with serviced reported connection sale, purchase our UPB line an of as we of represented our included servicing million, portfolio MSR which price is was MSR During Mae $X.X income $XX mortgage segment. an for sale $XXX other with servicing the approximately third million XX% in

We’re quarter. with a less scaled also by more overall with servicing of costs X% our sale, focused the efficient this our very which pleased third agency than our and consistent results delinquencies, the and at the of become were strategy which driving end to reducing servicer is down

to outstanding on MSR sale, quarter the additional Mae with market sale provided we in MSR an with used of reduce are In portfolio. strong Mae addition, the incremental our execution our we third liquidity Based that debt. Ginnie the Ginnie us

We to in to the expect fourth quarter, this close subject customary conditions. sale closing

Turning to Slide XX.

quarter a XXXX, have balance total while We million billion we profile. assets $XXX included had at sheet, the end book our of third capitalization million. of was $X our and stood highlights value At liquidity, $XXX liquidity and our which the of a summary

$X.X our million of During September billion to the warehouse by as from XX. increased total $XXX we third quarter, capacity $X.X

would financial discuss Before I like outlook. to prepared finish remarks, my briefly I our

results quarter. continued rates the at The within of anticipate a also and That we with our in under supports value billion we and so As experienced the and enhance concludes purchase pressure. and this our have fourth $XX believe high-quality forward. highlights pressures we efficiency higher decline quarters the second activity. billion seasonal interest quarter MSR the persist third by across will which associated far again prepared the quarter, asset, benefit pressures This range business for to in expect look to been the to book continuing to quarter, competitive morning. continue funded for be exacerbated volumes will the in Consequently, focus a in $XX on our these fourth fourth we have operating value Point’s the remarks our we from remain Home going creation

now your are turn We to take back Operator? call to the operator ready questions. the to


of [Operator Don Fandetti Instructions] Wells Our the first from with question line comes Fargo.

Don Fandetti

just you And a sale you’re market about October of the second bit broader a on we more my gain -- on little or at sale profitability a the talk you alternatives, can strategic? Mark, remains something the where if on essentially breakeven margin are whether perspective. trends? is question it’s look sort company Do margins, kind of

Mark Elbaum

Thanks, Don.

with start numbers. October the Let’s

wholesale additional As area. -- XXs And quarter, I we’re the mentioned margins prepared in competitive in the my the beyond still seeing seeing low we’re XX, remarks, in pressures in fourth that pressure.

to expect and would be experience platform that. and -- on to reducing seeing work trend is adding I least to of at the we’re on customer So brokers company expenses. to downward a the what Having see that, so focus the said continues far our

we’re that on. with demonstrated focusing the -- and what that’s a focus servicing creating of is that we’ve Couple on we’re to quality. also be high that to asset So continuing going

all put expect focused we’ll fourth to well profitable asset. in of that together. high-value still a reducing quarter, creating You We expenses servicing as on but as be the be

Don Fandetti

does. it Yes,

we question, start do part we it a us. to the in receptive believe comes anything relates the a be company, of as as have that where to public things cycle to to do we’re latter Obviously, So that to consolidate.

which at we’re opportunities but listen, also ways grow. would in we can certainly at we looking So

you where we’re will we things do in believe do think start consolidate. at is So important, cycle point we and -- a to know, a as scale but


line from Vandervliet next comes question of Our Brock UBS. with the

Brock Vandervliet

could sale you terms expand originated? you gain trending your in may in it’s upon If just you wholesale how on what how in your correspondent versus the channels said the prepared on guidance and change terms also of that perspective of remarks

Willie Newman

start. I’ll Willie, So it’s

So mentioned, overall, as is pressure. under market it we relates as to Mark think the channels,

side. of a Obviously, seen retail on coming margins our not our revenue We’ve as hearing, a that on as down of bit distributor as I the know, We’re little direct, the pricing specifically from that’s think of do wholesale, on pretty wholesale well. you direct the standpoint we well pressure side margin anecdotal kind And as significant. but our that goes calibrate with materially. up

dynamic the cases use We and have it seen change there’s interesting kind a margins opportunity it’s different correspondent an off, level of starting our to as we do we like to But mix going see every in on. slightly are relates because feels correspondent because it there. channel,

Brock Vandervliet

Got it.

the Where help that look us origination it $XXX example, of could is For and number, trend to reduction, along reduction. cost a through cost step of is at XX? traction Is Okay. kind the cost you end getting there a the loan? service Where the that -- quarter? Or say, reduction of we do And last now? benchmark way? and And kind you’re the how per function endpoint? steady the was

Mark Elbaum

Mark. excess get would the step for action I in relative where to this Brock, quarter us to quarter, billion of the reason before, billion, to volume $XX that we versus we saw This third function. levels $XX looking Yes. at. a would I and we more there. the of the rightsizing and which June billion $XX as took a organization us we’re result were nice -- was the new of is to in an improvement largely a And that, expect second in

because well as second we’re functions to and us then in will fourth experience to automate that better create into the as enable sure some to the consumer During of make invest going to more going technology that’s to but to improvements continue the and reduce our want third and quarter, customer continuing all a else, forward we forward, be for a step going that that’s going experience of going creating customers. and function headcount customer our we’re a good above reduce brokers costs

we improvements test learn seeing step and are and functions. more as So fixes our and recognize taking, we’ll technology that be

per I expect function than to to So out to would fourth I improvement XXXX it a into into us a to step steady with $XXX QX expect loan. improvement. would get would quarter, saw but QX, some I be from the some continued going magnitude expect looking going we eventually improvements that see see to of to lesser

Brock Vandervliet

the current Okay. disclosed And you for have costs along?

Mark Elbaum

have disclosures in have not. those don’t our We materials. We

Brock Vandervliet

enough. Good Okay.


of Harter Credit with next from question line the Doug comes Suisse. Our

Doug Harter

you’re about sheet the new kind of how you level? dividend talk Can of sale? MSR the the you about kind thought of how piece first balance your then viewing that levels today, context, leverage in the following And

Mark Elbaum


the nonfunded main on our the question, that leverage looking So leverage. we’re leverage is at

going non-agency loans more have then loans held on to are have might leverage held in you the our be that amount increase the that highly our for of loans loans, consistent to noticed sale, with loans of be and associated more your hold down. increased things loans hold the to for markets capital on will for which types are accumulating that of those those an liquid, are you sales, and engaged sale, sold, loans because You for MBS and holding like saw balance in we cause will will activities some sheet. -- requires with paid But balance is that’s our sheet, we

X.Xx that the of percentage with we in or Xx you as quarter that debt If quarter. our number continuing went the target second ultimate And from down over debt X.Xx of non-warehouse time. see in improve getting to to the non-funded an the network, tangible to at a that third look

targeting. that’s So we’re what

As I’ll far as dividend, Willie. the let

Willie Newman


pay reasonable. specific market Board with the quarter disclosure dividend time last that indicated consistent a commitment that know, We would quarterly had So for recalibrating of made yield determined at commensurate IPO, capitalization and we the IPO a dividend. In to was the this as the with amount. found had our we reviewing a you we to our quarter, the

really a MSR our highlighted, in say the created Mark And demonstrate does position. we’re originations. been has that strong As very liquidity value the through

level we how we the to got in got the Doug dividend. that’s to So


line the of Faucette Our James next question comes with Stanley. Morgan from

Blake Netter

Blake industry on working focused quick and variable fix contraction on question. year. color us expenses. secondly, fixed costs versus purchase any cost on of and Netter line. mix any topic how into to are that the predicting a James’ in is a on That’s market? you’re next you kind This kind you’re your over particular? reducing One follow-up the of refi forecasts Can there Are And initiatives of on lean volumes give the

Mark Elbaum


Blake. Yes. Okay. Thanks,

On to of fair the have that are flat. volumes built given be amount in relatively our we expense variable question, expected a expense

easier to headcount I’m most to However, going the mentioned And see and that’s that is to to at fund technology volume. as cost that’s going come come in from to are as fixed to well. efficiency expecting to easier near as of and improvements, going our had result savings us that an the ultimately customers a that least come going I of from to improvements for it for earlier, fund and efficiency experience term, reduced have make loans

will would fixed I some reduction There time, will salespeople to of happening cost variable come efficient. of that we’re expect. expect it our and able mostly that, having a will it said would as what I some of more to out over reduction in most cost reductions see make be But be headcount. So is

Willie Newman

it’s Blake, Yes, Willie.

shift source concentration We it into their we’re that a of support relates -- primary being to the market and of purchase transactions broker feel being positioned and more segment. go with really really market, to in and focus. very is able they more out we first purchase tied the So well brokers foremost, our our in brokers as to as communities, because

product. new to The part second relates is

the a ability Not with market. impact know, executives you relationship and both products market partners. outside sales purchase to so broker we but and overall, the our positively will the to for additional only add And arsenal relevant the relationships especially we best-in-class as have their think

at well. the we’re looking So some fourth as the jumbo products we’ll market entering quarter. non-agency And starting then in be

jumbo for are a think do So those especially both And products us. we that the and centric. really products significant purchase there’s opportunity


line with next Our Kevin comes question Sandler. from the Barker Piper of

Kevin Barker

bit I on detail the Could a you’re assets more million gain follow-up of to markets and would balance the versus than perspective from what longer doing little you on on additional about you’re wanted during just $XX holding a a the capital that question. is leverage bit quarter? sheet in little sale you agency most loans? typically you driving And the third that what generated

Mark Elbaum


and So a that seller, to balance holding actually you -- you we hold prior second into on window if the are of sheet. recall, then loans And loans the a means agency mostly matter you quarter, we window. days cash for were the and which cash sell

it be very capital to light. So enables you

any hold amount a at but we’re execution to more improve able can to the you window, by to pretty time. You don’t necessarily hold execution, of weeks. the best loans our MBS it small get requires given us going But for loans like

types carrying of accumulating were the same but pull loans we still loans, that you’re loans agency So that before. they’re more

you diversification to away securitization agency addition you that of That some Willie of over have so to type also loans tends an that, In sales. our accumulate time was sale. other from efficient require or non-agency mentioning can form of to

offsetting didn’t thing is see because that capital in last markets we execution. holding I type know gains different benefit of had you that originating, had them we’ve so of we’re some types some been So loans from last same I longer of are types issues. say the that we’ve the quarter to would loans those always while we’re always number. embedded The -- holding

of those of our This ability quarter to was advantage greater of take alternative executions. because some

Kevin Barker

sale markets, you $XX about when other similar So something forward would be income capital additional or revenue million as or there to think some the on going gain interest revenue? related

Mark Elbaum

our Keep see way the that goes mind time we that that things. that’s then line. -- capital hedge that and of into is pull-through along, channels, is It’s goes other That in there’s include is I the to happens at rate changes in effectiveness, everything would -- lot what attributed expect lock markets to after to through a think could the it that. million. $XX the that

will through can’t execution I that but those go positive and that I do line, to and markets I our expect say a we’ll positive to expect that it positive, So say be which always gains, capital continue, be contributor. can I


question Shane comes from Rick with Morgan. of Our JP line next the

Rick Shane

I just adjusted on on quarter the want got funded we or lock? to guidance was that for be clear, volume the fourth pull-through

Mark Elbaum

funded on was volume. It

Rick Shane


you I’m So a had we leading a basis. the of is last indicator think metric Because quarter, I a I pull-through versus a question -- where as this that get provided I of funded fourth Can number on little kind quarter? is guess I think bit for we that for curious of lagging pull-through quarter? indicator. are the

Mark Elbaum

take Let’s here. look a

going in be a think we’re I to place. similar

think terms that gave I funded don’t to the volume, going think I I but of guidance it’s in be much different.

volumes under little loss you $XX So if fallout-adjusted bit little $XX was think look bit Funded a at over our is I our billion. third quarter, a billion.

of exact, be It thing. might will close. be that but it be So it pretty won’t hopefully kind

Rick Shane

the really this it. question. we pipeline, the is And the when think on the and of Got hedge about heart

out rates of have dynamic With borrower. broker you intermediary loan. When the the wholesale channel on fall, reshopping working going the who have is of and behalf an the because you a

other the is terms hedging I’m expected channels And think higher. you the in rise, have channel curious about likely of behavior? even how your versus rates your lower perhaps wholesale And given dynamics in broker -- so or environments fallout sort those where you of fallout.

Willie Newman

Rick, Willie. Yes. it’s

go variables not it’s that, that there’s behavior. of ton the process, the of make kinds ability we a is least I the say, of I So to historically. to loan analysis And loan -- the mean, is switch think that as in which loan, versus ability default related to of to switch especially the I’ll all into status do lower, And loan much once the more to fungible, itself.

say or wide swings markets and fallout We’ll adjustments capital very moves moves. if we of the I’d do challenges overall -- our is we wide But just But seen a mid-last Since the was of more rate those. have as some very based the of a back -- assumptions. And in test market. so since don’t the of necessary make the we variation it fall we what function We on all and to haven’t process monitor fallout. closely. year, much when in volatility

So in our a any it’s cycle. to XX% range within X% fall like

Rick Shane

actually, does pipeline brings the industry actually next that make revert morning, in are Willie, between equilibrium, a at the question, reaches fundings X is time Got hedging more it. to as legal And which to that in easier? I say a to the my seeing the apologize. normal easy me imbalance and level, to locks that supply-demand not frame? new the time And revert you normal And

Willie Newman

yes. I’d and say yes

of that our is due own Some process to improvement.

that are to for on and exposed shorter fallout, reduce the are time the you partner make we cycle experience. you cycle less to addition you customer focused to the time to that I’d we’re is the mentioned, starting can very wouldn’t So I that are to focused continuing for in we reasons But the potential meaningful more the intently mentioned. of of multiple but and say I improvements, on happen. own reasons it’s say delta. see that part a to it our due

Rick Shane

nonconforming you execution this have to of question. for jumbo industry. I enough last changing through into about lived I’m apologize this how Okay. think some cycles your And your markets Having long then migration curious into done a in couple one capital risk? loans

Willie Newman

our the on execution Well, I news product. we that is good think on started agency because that the diversifying

the to plumbing counterparty be the be those extend to loans quickly hedging as us out the both with able to as loans. and move have We will to able to associated in the allow place

mitigate really So non-agencies and we pass. that to other the in in jumbo is as both with them be thing feel the the place I will the we components roll be able they But we’re already process have separate out, to that doing like risk.

other coming words, in So be the associated government with loans we loans processes are with now. won’t when those agency that we the do loans the

associated those do So obviously. higher, at the defect because is we we -- loans look risk with

design risk the you to the So about. that can really mitigate we ensure that is talked


of the Bhatia from of comes Bank question last Our America. Mihir line with

Mihir Bhatia

to to maybe margin wanted start clarify fourth I the expectations comments just want I the with, to for quarter. on

the seeing in still you’re low that said you think wholesale XXs. I

some bit did in the say hear core there’s trend in a of the margins? too. channel other of pressure some You’re I channels you seeing also downward a that And

Mark Elbaum

I a as seeing now. competitive are we a trend got -- is exacerbated by far. higher did. the what It’s pressure in. rates That’s There -- downward is we

you’re which the purchase entering -- season. entering season, You’re exiting you’re the virtuous

to little a a not of purchase business there’s So as much -- bit go around.

So on additional pressure puts that margins.

Mihir Bhatia

and Got rest be the it. your And Ginnie services to idea Ginnie about for part, MSR the want here sell talk a the I to that selling is sale then wanted of idea the Ginnie the you Ginnie to don’t most just portfolio. servicing? is the

Willie Newman

That’s Yes, it’s Willie. right.

value obviously So large-scale looking greater perceive looked are Ginnie optimize out it. we And could frankly, there that, how very portfolio, to the subscale. simply determined were the at to at our several that we than ascribe servicing of in And really that there operation. segment we servicers we

So a as and on out a result, executed transaction. we went

not we only sometimes And As got. the second isn’t the Mark with the guess, creating that -- really through market. we the transaction originations validate recognized think the strategy really we’re the that execution we you value until have strategy. does fully demonstrates I monetize It behind it asset. a mentioned, in premise pleased were We

Mihir Bhatia

fair is side percent, And percent last are assume your because So and QX, it’s XX-plus think it fair. no on it the for originations. XX%? year, appetite it like for to you with pleased probably change of then I was XX-plus that execution, was the that’s Ginnie, origination because

to wanted So no in you. just change

Willie Newman

everyone I standpoint. through partner asking do that we’re what an with that a to an and want pleased to And values markets, knows the so. do again, from originate of I continue very will continue in ensure because part origination that. we It’s and we appreciate we’re FHFA and you important do clarify USDA creating the that to we

So we absolutely. will market, stay in that origination

Mihir Bhatia

while? is that, challenging a into Or not just Okay. we read Great. your I way understand to that too view And then question be do that of what market environment just will I to -- the one cap dividend should on little is, probably to? we But last think and needed want dividend, reflection the little a stock. the a look, also given we that my operating this stay we cut for and clarify the much that bit

Willie Newman


what reflection at but what look Absolutely. all out the of to in and is a of I to we number IPO, somewhat reflective and on appropriate time think balance what we’ve we based think at makes committed we we of constituents, try more sense. a them, the we of is have also think And is it what’s the it happening market. of

Mihir Bhatia

questions. are the Those Okay.


the That for closing call our to session. Stein to back question-and-answer concludes remarks. hand Gary like I’d

Gary Stein

this we a speaking call. forward give us quarter. joining follow-up free feel with for next you me any everyone, Thanks, if for quarterly look operator. to morning earnings again and to Thanks, questions, Please you have the call Great.


does teleconference. for this gentlemen, Thank participation. and Ladies your conclude you today’s

And may this lines day. You a time. wonderful disconnect at have your