The largest non-bank servicer of residential mortgages in the U.S. just completed its second major acquisition in a month.

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

The mortgage-servicing giant, led by Chief Executive Jay Bray, intends to expand its capital while laying off 800 jobs in November. Mr. Cooper will transfer Home Point’s 301,000 customers to its portfolio.

“This acquisition is consistent with our capital deployment strategy of expanding our client base, focusing on attractive risk-adjusted returns and maintaining a very strong balance sheet,” said Bray. “Home Point has amassed an impressive portfolio of services, Includes traditional loans to borrowers with high FICO scores, low coupons and strong equity buffers.”

Mr Cooper’s profits fell sharply in the first quarter of 2023, with net income of $37 million, compared with $658 million a year ago. Loan servicers, brokerages and other real estate firms across the country had a rough start to the year as high interest rates, the impact of banking and recession fears hammered the industry.

Home Point, the third-largest wholesale lender based on last year’s originations, has seen its customer base shrink from 442,000 at the end of 2021 to 317,000 at the end of 2022. The company, led by Willie Newman, reported a loss of more than $220 million last year.

Mergers and acquisitions in the mortgage industry have increased since last year due to sluggish demand for home loans and a change in leadership, according to a report by mortgage industry analyst Stratmor Group.

— Quinn Donoghue

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