HMPT - Earnings call transcript Q4 2021

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Operator

Good morning, and welcome to Home Point Capital's Fourth Quarter 2021 financial results call.

During today's presentation, all callers will be placed in a listen-only mode. And following management's prepared remarks, the call will be opened for questions. Please be advised that today's conference call is being recorded. Please go to the IR website to obtain the earnings materials. the at to Home turn of Wilcox, now Relations Investor Point will call Ginger over Head I Capital. Thank you.

You may begin.

Ginger Wilcox

Welcome Thank Call. Operator. to Quarter Fourth you, XXXX our Earnings

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

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

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

Willie Newman

Thanks Ginger. And good morning, everyone.

provide we'll about the on a fourth During that, believe as billion my the fourth talk we prepared to the well focus first into the our XXXX. we and far cycle. and part compared key most $XX year quarter our in of the generated as fourth the navigate December take details origination will third remarks, In so challenging of your $XX briefly in quarter, ended XXXX. will we seeing what for to quarter, of what business I'm also Mark the After $XX going billion results, areas of billion results quarter we're open insights XXXX to call through more XXst, up I'll funded volume the be questions. mortgage review as then quarter XXXX for our in

XXXX, generated $XX billion, a XXXX. of For which record we origination full over increase the year XX% is volume

the to base partners origination year. we quarter we with added volume nearly our strong third-party increased and the our new than expansion for and the by ended partner by XXX fourth XX%. throughout In in made XXXX, propelled was XXX X,XXX the broker relationships partners, partner partners. broker Our We total quarter, more correspondent fourth

represent in with partners market and quarter a in the XXX,XXX share us nearly fourth down the portfolio, our we quarter. for from X% a opportunity and Our significant provide is third up ended new XX% with year-over-year, which springboard growth broker XXXX. customers, [Indiscernible] servicing

we sale fourth sales, billion balances our completed during $XXX quarter, will approximately XXXX. Even million As proceeds. in the with total Ginnie during grew to shortly, MSR Mae, Mark $XXX discuss a with MSR XX%

million In comfortably of or generated to strategically XXXX, strengthen generated revenue we net we minimum per financial of debt our discussed in for quarter, of $XXX assets. a even The perspective, the $XXX sheet challenges used net will outstanding generated our reducing of partner a above $XX target. evolving As and we liquidity MSR servicing our From experience. and monetizing more we share. in of presented XX% are by actively the and million in the managing and million recorded value be XXXX, return our income net our quarter, XX% $X.XX strategy diluted fourth revenue balance net million. by Notably, equity total income with last investment $XXX on total

we particularly on in wholesale the margins, pressure been significant channel. have previously, discussed As there has

quarter, direct of progress some the the put pressure the our has In operations. To costs will our offset rates made we prior we reduction of meaningful to a origination efforts in which to continue and interest are that new pressure, Additionally, in efficiency versus a lower deploy expense mortgage volume. technology costs quarter. that improve rising, margin on accelerate fourth $XX management million with origination

Looking at mortgage at capacity We're of the market part is with while to entering this cycle, a focused XXXX, challenging continuing all-time to downturn refinance while through higher a future high. navigating industry the rates leading enable on industry remains mortgage shrinking growth. an

evaluated Liquidity, balance at priorities. assets and Point's sheet Home monetizing levels. are these we attractive thoroughly non-strategic are our such, As have

create Rigorous As and improve our these primarily management. leverage, growth. headroom previously noted, proceeds will future used cost to financial reduce for ratios, be

to originate. We reduce to have continued our direct cost

our lower variable to servicing a active relationship provides also ServiceMac, expect to we MSR addition recently our expense with management. platform announced for transition In This flexibility construct. to

are functions. zero-based in we the of executing corporate review Additionally, cost our process a of

that partnership lender growth efficiencies with broker Finally, significant channel. the $XXX have to quarters sales regards which We driven most and XXXX. liquidity, to close anticipated by and wholesale growth we to to are generate will million. non-strategic expected the our we wholesale continue and These to assets of market other in first in proceeds will share in MSRs in place in sell opportunities, the market to share. the second are agreements invest be believe grow strongly accelerate well-positioned excess of

starting entered it And to MSR noted, is a much advantages ServiceMac of get way servicing was our have since just very others at early the into market to manage forced In momentum This sense, closely a to to as dislocation gave side, and partner we scale driven competitor with the like-minded as operations. scale to leveraging have look contract. most to origination and with process intend agreement to us the to transition that business. benefited Servicing costs expense started became XXXX. servicing start costs the and before head been we are managing active that wholesale we the as cost a in to us, overall evident effective an we operator. aggressively specific us On management on management,

the is and Point, lower of variable in benefits with growing costs Home invested a platform result For capabilities. the

transition Additionally, our associate, our provide ServiceMac enabled continuity on customers both and for the and will partners. will with take servicing which

believe While requires defensive where lie. offense fully environment believe play actions, on greatest we considered we to continuing the opportunities what be the may we intend

that For wholesale. us, means

HMDA benefit turn, cycles ten and in as fees top in wholesale more to compelling benefit Home that to will as inherent in lenders brokers the the fuels the This the share which segment. is advantage seen consumers. offered XXXX compared wholesale retail officers More data, of a to between securitization the recent such even purchase the for brokers rates growth top XXXX, consumers wholesale is this lenders $XXXX become Point. lenders, the average supportive resulted origination ongoing. by previous markets and for and brokerages in affordability a select ten as through we've including centric brokerages, loan valuable, because to in rise The data, created consumers a enormous the XXXX number of As wholesale by alignment increased creates to According in the time rates market interest issue. drives becomes increasingly and last rose mortgage following opportunity cost advantages channel in officers rates of more interest year. an XX% joining starting materially, This XXXX,

cycle XXXX. with Home Mortgage type of brokers partnership wholesale growth lenders wholesale can We with consumer. we professionals, focus rate better strong built in relationships business estate local for for channel. like strategically the experience and have even with Home a Point, our our have greater expect At of real to on and the Point the this provide

deliver. costs, rates, for up, consumer lowest desire rates brokers closing which stronger, even interest positioned the As to and best possible will be go fees are

overall widely share are X,XXX transition as in addition, with top the our to partner country. through and over ServiceMac continue in wallet of mortgage mortgage with. of growing channel, technology on contraction navigate environment considering experience. enable redeployment to resources Even from the and partners the market, expanding wholesale product lenders competitive including will support We're engaged growth we the especially one enhancing process the operation In the the expected of already to servicing offerings to the focused we the

position the puts of to and a to With Our Mark. over I'd turn flexible in will book like call us the about channel. build we great driving ultimately strengths summary, business position leverage model value. in to lending, In protect continue that, to in a growth grow on as leader the our wholesale

Mark Elbaum

Thanks, conditions. Willie $XX foundation totaling in as from process-related Willie. with presentation, And which Home beneficiary for a And built XXXX good noted, earnings previous no and the continue made, strides volumes we our morning, with a doubt Slide the everyone. X solid long-term of financial we've the strategy. was year been with years, loan record-setting Starting billion. on Point, to execute favorable that we There's of two have can market the we've

key upward continued and ticking deliver quarter, began metrics. and origination to the servicing performance Even strong compressed as rates fourth interest across margins we in

addition, included our In have we on results. return equity

XXXX, showed year we a full of on For the return XX%. of equity

Turning X, revenue in to million XXXX. $XXX $XXX of annual the provided quarter quarter Total a the the we Slide fourth quarter of XXXX, our net quarterly compared in to have results. $XXX and and are in financial million, summary fourth of third million

our in year-over-year, billion of in mentioned the reductions of quarter fourth segment for of drove origination $XXX snapshot of Originations our segment generated fourth full quarters. quarter income have XX% $XXX in fourth expenses, Our quarterly we year. the activity, continued discuss in million of quarter was in third-party XXXX, net due channel quarter quarter funded XXXX. Slide was was The XXXX wholesale the million of XXX XXXX. relationships by Gain of quarter from relationships as expenses, in X, the In segment the on quarter of have million from portfolio fees XX% includes and servicing compared million sale portfolio quarter channels XXXX, capital of end initiatives. our total results. end primarily XXX versus the net fourth a income XXXX. $XX XXXX, third the origination increase a servicing value of a we quarter snapshot new prepayments $XXX portfolio, versus of sale XXXX, the Mae our relationships a the of net lower MSR and origination our year-over-year, which strategy, XX On the in sale. servicing previously, we and third seven, compared our third improvement of XXXX, to XXXX $XX XX% quarter and Slide the quarter. in of $XX quarter, million fourth the quarter results. quarter generated and contribution XXXX. On up Ginnie quarter volume quarter expenses in with included billion volume of X% a total aggregate, origination basis our volume X, reduction million the basis of quarter basis impact $XX at million $XXX fourth customers the revenue last decreased the of segment our million servicing Consistent of Similar in of in of XX for quarter. of during over year-over-year of $XX the quarter XXXX, overall the moment. expenses. fourth third the origination increased improved of XXXX, XXXX, quarter in financial this $XX of of a driven markets quarter to X% and quarter. of decline end were small to XXX,XXX direct to quarter slide of corporate points segment servicing in a attributable by $XXX breakdown of margin to of $X efficiency change in in fourth I direct The third in to XXXX to effect quarter XXXX, XXXX, XX% the giving billion provided points points XXXX. to before UPB to Ginnie quarter represents last the compared net of an compared amortization. The the the due the servicing the XX% the the XX% the million the year-over-year Mae of to a $XXX the segment's the fourth third fair reflected income in $XXX channel was to to fourth in million net XXXX million of Loan to third the compared a fourth X% five XXXX, The the compared our the and We fourth nearly in of of of third from last in and sequential we in rising saw MSR in will fourth XXXX nearly servicing the growth of Which of over At in number margin at last of in by quarter from months XXXX, due of surpassed slowdown due XX grew the nearly the and and in new fourth fourth quarter XX% the portfolio the partner expenses is to XXXX

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

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

Willie recently our of the monetize with of sale assets assets strategy and examples the ongoing non-strategic mentioned, MSR costs. to MAC servicing Service non-strategic with relationship As manage along and are announced

total MSR an MSR represented price fourth the $XX.X was XXth, we Ginnie September the During approximately million. a quarter, UPB servicing portfolio $XXX sale which as XXXX. XX% for Ginnie approximately The of purchase of completed our Mae of rights with Mae approximately billion, aggregate

we ServiceMac to By servicing and operations, which a loan. their expect MSR had capacity Point's our move advantage have and enables the enhancing ultimately product channel, and would scale, impact partnering transition on partner taking provide sales, MSR to our variable experience. flexibility us broker excess the to also With resources cost in servicing we growth Home a have origination of platform notable per with manage cost strategic to including to support expanding asset. redeploy the lower additional This in offerings our

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

a Board of Home shareholders the $X.X of dividend for Directors billion $X.XX payable of of December per total capacity warehouse at Our remains fourth as quarter share XXst. of tenth. company of of to authorized program million Point the has XXXX, Capital's a declared has cash of to issued record also The total program March repurchase its It expires stock. December up repurchase XXXX. common outstanding repurchase stock a where on XXst and may $X stock as of

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

greater As improving we look of at in on result of degree quarter may the on we a are first XXXX, variance production. focusing This margins.

will we XXXX, which with billion effective fund book sheet, to the In management, Willie ratio XX regards asset range. to in give of assets. to point a to debt one-times. agreements sales XX to basis balance have quarter first cost rate of the us We we our are $XX between through With expect to us sell billion protect taking benefit leverage and as TCE in all a our $XX corporate steps environments. also value towards margins in non-strategic path target place These noted,

product the operator morning, now volume, prepared from offerings, in to for the back to As Operator. as benefit ready year. concludes new well partner base expect remarks to last origination questions. to That established we call the the your from take expansion benefit we are to we this turn expanded as our

Operator

session. conducting be our question-and-answer At this time, will Instructions]. [Operator we

proceed Our Douglas comes line from Harter question. your Suisse, the of with please Credit first with question

Douglas Harter

$XX about Thanks. Hoping stake to and is talk that -- of more I bridge sales, in that the guess, the included $XXX strategic non-strategic asset the of it -- long total? million

Willie Newman

good Doug, morning. is. it Yes, Hey, It's Willie.

of -- assets. are the longer So it the rest primarily stake and this point at the MSR

Douglas Harter

you price. at sale year-end million was to And us of frame can tell reference just give $XX long of where that us just bridge, marked the on a just

Willie Newman

it I turn Mark. will to

Mark Elbaum

Sure.

was quarter. it million at where -- So it month-end -- at marked about was to got as or it was it marked $XX --

Douglas Harter

it Got

Mark Elbaum

-- you see held for sale a at assets you long the look to sheet, we bridge separately if out our you'll our at sale would stake be go and If balance have bridge because broken XX.X actually. that long

Douglas Harter

from talked repay would it. liquidity then about remaining which look immediate think those the the one And the flows sales, against cash just thinking Got trade-off you how about the -- on then versus kind you to of I and of long term balancing just two, about sales, as those you you're the guess debt servicing MSR you.

Willie Newman

the and so the part -- up had first afterwards, we're in first, after at balance at you have take these asset the still well, I'll Sure. selling, which we'll we've sales. if what you billion look look round if MSR second dollar as values or is obviously, a

will have from And the sufficient can so standpoint about like servicing. we talk for debt. revenue/cash we you balance term flow feel a Mark, the

Mark Elbaum

Sure.

As we'll that's that redraw the And proceeds, our we is for liquidity reason facility. the be we'll us because related that to using -- can as idea to pay the gives MSR of it use good debt we to to strategically a think we the And down use growth. sell our pay have add Willie's and we then point that the to to new then down. would facility more MSR, to use we that MSR fund MSR to that ability should our production to choose continue

capital becomes a So in that line respect. working it

Operator

the Piper proceed of question. from with your Barker please Sandler, comes with question next Kevin Our line

Kevin Barker

that Is over is a to number? all billion-dollar cadence Good that or going the quarters here morning. the to that to few of in balance Could going happen get near-term, sales? outline happen to MSR you anticipated

Willie Newman

morning. It's Kevin, Willie. Hey, good

this happen the we've outlined. that and in next the quarter will that $XXX quarter, So million

Kevin Barker

real And that, big loss all that Okay. a those on this fair point, at gain value then have So is it's right? or mark-to-market, been no right?

Willie Newman

Yes. Go ahead Mark.

Mark Elbaum

That would that it's right. No basically fair -- going be be at value. to

Kevin Barker

bit what's is -- quite the the been -- how So. quarter-to-date. quarter. -- Rates first MSR have up of in up much Do you marked your a much your how

moving so far. the given Just rates

Willie Newman

take you do to want [Indiscernible] Mark,

Mark Elbaum

something rates typically wrong will with happening I'd That's Sure. And answer you furthermore, whatever be not today we tomorrow what's given now. give right disclose.

an stay tuned. well. So be as that eye keeping We'll on

Willie Newman

is things monetize important understand the think percentage We've that, valuation valuations substantially. you able that do meaningful of run a have up to been to help everyone I gone up. obviously,

feel we the in position we're both then and the to will about So really asset that asset that good monetizing with hold. continue to regard

Kevin Barker

you announced Yes. between XX that's buy capital debt the of with you're you steep Because is if today into targeting in just quarter, to right the $X equity it and going first ratios. so some the lower to trading corporate that's for now? somewhere also points so versus double-digits? others net we've seen but your the the delivering, supportive reported fairly a better I'm are makes like XX And just book that of debt have you Can you going far. Why to sense discount par. or just wondering a million, then given Because and also on. going feel to buyback, value outline buy markups basis just why debt not everything yields be

Willie Newman

that maintaining. us we there that like at -- have that out the feel is rate having the we worth debt So

in As nature. Mark down that more pay we'll said, is operating debt the

buying goes, I'm XX% dollar we sell Anytime someone like now, the $X.XX a as to we're a know, right to and feel wants tremendous to as $X.XX, look value. of going far me XX% that's them. or book neighborhood selling value for in equity the of you at As

Operator

you. Thank

with please the Our next Vandervliet Brock of question. your line UBS, from proceed question with comes

Brock Vandervliet

that on on the by about gain pipeline for on Thanks sale Slide and morning. the question. in you Good channel? disclosure can see Appreciate sale by dynamics channel the XX, gain on talk you where

Willie Newman

start. it's Yes. Willie, Hey, Brock, I'll

let a sounds than is become environment or little we again, on really can the how order it bit So but challenging, little historically we move counter And managing which sale I looking at because know to margin intuitive, push volume we've changed more we're fluctuate we're willing bit bit to more perspective a so margins. a up. how in have margins specifically up, we're our

Mark we're little So we you about if really cadence trying over where establish a want margin up time. move more to talk to a specifically that.

Mark Elbaum

Sure.

of showed that margin basis margin for XX about being to And would Page talked we XX forecast on XX the to XX. in point first we Brock, points the basis quarter So the be range. related that

little about that we're seasonality, well up billion expecting it get margin, billion bit our So And to from $XX would willingness our $XX as be billion between is more then in volumes this down range, as to from higher there. be rates creeping a and the quarter. to $XX.X

where that's margins. we're seeing So anyway, in hopefully helpful terms of

Brock Vandervliet

Yeah.

guide. Just pipeline there follow-up, seeing you I would further might And and loans are pressure to be that that drive heard relative think gain you Because as a the hadn't are mortgage increase able I there for rates. higher? to interesting. That's QX? that on How that sale. How would are underwater

Willie Newman

Brock. Hey, Willie It's again. Yeah.

a of we partners price, our I say just then wholesale discipline analytics combination specifically around the and our of side, the and degree greater on how price. around So improving

have long that. But position more as in fluctuate in the accomplish bit be we're think, order historically lead to So said, run, to volume we willing a than better I a we in. that's

Operator

you. Thank

the Rick Shane question question. comes line with next with JPMorgan, please from of your proceed Our

Rick Shane

for morning. my Thanks this taking questions everybody

off? of you funding thing, terms the for a First partially my first locks first partially provided metric, quarter. the the is quarter, the during in What guidance gain outlook is looking the locks. understanding is that backward for given really forward, on sales that's the Funding what given that calculated just is

Mark Elbaum

the the guidance, I $XX and funding both billion, $XX would answer billion as for question for Good same give well locks. to yes, Sure. is as

Rick Shane

where it I fourth sold mark, was question it And Thank helpful. and was at If the to is, you. apologize. MSR at have the it's you're carrying we look $XXX. currently carried if in the $XXX, at portfolio look quarter, coming next sold at That's couple $XXX little quarters, bit was -- MSR to say then I said other the I the we there's Great. we its those a fair any of gap when are you in Kevin's a question, $XXX? the closer that that it but you'd of didn't think to like I gains, to could expect be there response does know additional expect about that profitable. them it be want sales over seem to is

Willie Newman

fair So extraordinary I where migrated would really that the get on say We execution has the was. did value to execution closer sales. those Ginnie Mae

expect that wouldn't -- as that, spread I values overall, ongoing. up. So the migrated know, certainly you level And of have

So closer on a value have as we and Mark we're in products. strong run-up, with, especially still the feel said, fair expect interest execution we lot to getting execution, our but the of like

Operator

Thank you.

Our please of with question. proceed question Faucette Stanley, comes Morgan your from James next the with line

James Faucette

what's as refies? Great. happening up? And is of from your volumes sense the cash-out looking the things contribution as you us with of -- the rate give Thank seeing beginning rates year a that composition since interest what to terms have you, Can market. moved at of in ask wanted have changing like been environment of then of purchase in the you interest the kind

Willie Newman

of we're mix the know, of standpoint, obviously is based a We which muted that seasonality, And the that James. supply is our on purchased. will at you Purchase be quarter. was as substantially cashed challenges from our the over remains flow increase how of say market. changed is will challenges XX% to it that what just XX% to this different extremely overall because a has believe about in we be see it standpoint point, the seen bit part last do now we're but be little I'd Hey, supply from refinances much composition the refinance that than migrating there Obviously some in be seeing. activity out

James Faucette

investment, brokers you expecting in been me, the right, on, a a then you're through just increase how like time rising terms as a Firstly. initiatives? in or brokers. new that I focused of to level you If of growing Cephalon are capabilities of the go channel, spend taking questions have couple you're but cycle, guess balancing those, I you've are sure the And quite to there's adding going bit through advantage technology making churn what obviously you array, you And reare secondly, broker undertaking secure higher around have Thanks. invest mentioned the you are -- to we of excuse churn. what and new of

Willie Newman

Right.

a it's really So question.

So from that origination really code on process. technology is which process a the the I'll standpoint, we've load to it's on path the componentized continuing say, across specifically our previously, side, technology, same technology implement been

operations the You'd probably processes better side across for the organization.

So that's, is say, I'd more quo. status

servicing of able on is the relationship and our focused to One do wholesale. had ServiceMac operation, side, the that things formerly to focus we on because are resources of move origination we those in the specifically

when speed I to think optimally us market as from similar capacity and relates the very the overall, we of And and look lenders loan at 'XX market saw between our to from there believe the benefits a partners remarks both officers an and saw as you really the it standpoint is inflow even give more a we additional So broker you cycle that in wholesale rates out. bear the significant than you boost into should result, XXXX, up, significant wholesale broker that a space. of alignment broker FY saw

us. say churn element would I the for So

previously, opportunity over significant XX% years. on a it's number growth materially we've of, opportunities X,XXX half than already will I'll nearly and it a to up, have last has been the more grow believe we couple partners of the the We say, partner signed

that in we're the fold the relationships So with and more -- we're overall. market we those focused point this have then on expanding at expanding

Operator

Thank you.

line the comes question. Please Securities. your of question proceed next JMP from with DeLaney Our Steve with

Steve DeLaney

$X your looks fourth that line? Willy that morning, think that $XX a there efficiency expenses that corporate and yet for of the hadn't line expense like touched room million Mark, and I to -- fell the in process been some show as in they Is Good progress on million one things quarter. further

Willie Newman

one? you So Mark, that don't why take

Mark Elbaum

Sure.

exercise, I just margins budgeting at especially is as mentioned, which corporate it's So hygiene, entire corporate. we frankly Willie the and company, conducting zero-based across be volumes impact that'll dropping. certainly good And a to are looking think we are but going as

reassess is just a continue. everything started we'll the journey we this and So second back quarter in and

balance that we what the And need make looking what's have there. opportunities we're have. nice to at we be So versus to analysis we doing will right of sure

tell the of do to to that I'm what certainly level. review going where or So right a to that our are, going targets with I'm we're not and thorough optimistic that. prepared you exactly that But get we're

Steve DeLaney

follow-up, long you divested Okay. had with your in at sounds there business Ellington. looking bridge. be that selling focused really down night Doug your wholesale or to and selling your at to on Home going like We really -- in Point the to also Ginnie the as It maximize core being interest attached affiliates of looking servicing investments selective that. to business, we any tangential long that Are noticed interest and trying bridge, be that remaining might In in other my mentioned equity well last forward?

Willie Newman

potential Willie. balance do Yeah. within the opportunities to at It's intend We look sheet.

Steve DeLaney

what could being you in way I Okay, going specific not may is things hearing this activity I be about, interested guess we so is see identifying type there's you some the but of would forward that or other non-core, describe say. I'm

Willie Newman

of then interesting a we're realign as kind I on volatile venture environment. what's and kind as we one, I getting where in think over in a think happened said, cycles And I based focused, is today call Ukraine business of lot liquid which liquidity. can get to of but it's me the as doing this

Q use lot as through identified especially and is But what's to the be to costs and lot the investing I time, of a been the is us cost as very way opportunities. going continue us being strategy folks as and are for we're It's same to again, be really a focused. having on onto indicated, Dan have trying indicate positioned, think there's in place shown their is being to where you hope a better at greatest to that's we're hold and that on three no think liquid. where being carry wholesale trends to important. very segment is what the cycles, And see Stephen, trends historical the we we're deliberate I are of number current as side starting focused. about to we being worth so than for necessary Mark and laser-focused

Operator

Our line proceed of next comes from of your Bank question Bhatia with with Mihir the question. America, please

Mihir Bhatia

and to Good ago. maybe morning. want to maybe like change through -- guess look weeks I'm guess, for understand just will your any side my will savings that quantify the in go what few Mac I I announcements now the And us there your does thank question. service to help just is it way site, taking a have from I way. a how cost particularly that change us start [Indiscernible] you -- strategy direct the on to you on thinking

Willie Newman

So the Mark you cost piece to back then the don't talk come why part? strategic about and I'll

Mark Elbaum

Sure.

service platform cost sales, and in-house, we cost cost ServiceMac as had least we variable at our asset capacity operational platform, number us is on kept looking a over and unit enables that would at have that a continue risen. challenges, on the of doing same What excess our have to the level created to we're would ServiceMac, they're move So the of that per of that do convert relationship and to which keep our customers, the going level. lower would as asset employees, of not a to to strategic have is MSR to have more our to then

us to per up our have a keep would quite unit would've the might notional gone a stayed unit but basis, more a what flattish which per on in happened, rather bit. our cost aggregate on So enables is basis have it consistency than

benefit So it. of that's the

start costs, the will choose now You portfolio our the depending much how to on up we hold. risen servicing rise across to service servicing have down and

a a fixed converted a to lower cost we've -- level. cost variable So a at

Willie Newman

servicing the origination But As that the there. in workflow it obviously are around function. new who of one working associates based the our on the with is it as are organizations to the said, Point dynamic ServiceMac interested benefits to with specifically relates is in that, two regarded Home relates I a to with ability between continuity And customers as maintain the benefits the many rate strategically environment. mean, a different direct -- Direct. interest with now

customers So with continue building to our continue was who in have conjunction we'll experience one a that be it when will a those way workflows -- ServiceMac entity they great in had

Mihir Bhatia

competitive to like, for -- That's it question there, you And movements get Thank other does of then around rate trying a came competition, Is intensity? maybe or understand you. the real just competitive it. the disaggregate margins fourth and did just Got fourth-quarter, intensity much the how that how guess drove for even there the amount. I question the much maybe out had fair in increase to versus was -- just margins what driven is us was any just lower. interest to maybe trying I just looking way at quarter? is the like I'm by what down

understand trying to Just the dynamics.

Willie Newman

question. but November taking I'd good was have mentioned go industry lot really to really pressure origination's With that ones capacity it's it a the hasn't is shared generally, puts as capacity that in remarks, margins the really seasonality I December, in the answer. There's origination have hold will around last discern, and my the you or short say hard environment. of just ultimately there yeah to this there. were of a point, earlier at and out really on so in much more

process but bulk indicated, So perspective. technology capacity and being cost management very why proactive that's standpoint, standpoint, as a overall Mark we're a from certainly from

Operator

Thank you.

Sandler, from please Piper comes the Kevin Our with question of proceed your line question. next with Barker

Kevin Barker

Thank you.

asked. Just a of that the questions follow-up are on servicing already some

has quarter that of fourth the could be service total and servicing given a the to six in cut would your from MSR. of the outstanding, value of expect measured percentage servicing the In expense expense flat cost or half. when you relatively UPB your UPB the Mark the change remain change levels operating costs, the as against been quarters. From MSR? in last your overall like operating Do Your embedded

Willie Newman

that you down? write did Mark

Mark Elbaum

Yeah. Sure.

cost lot scale We certainly building the respect to serve a a observation. made good as So off to some moving result of progress with well we as of internal moves Maes. made Ginnie in as of lowering our

that. created what that's So

fully on a cost in variable part ahead, service right example, I ship attractive portfolio decreases to to so carrying. the ratio book with the nature to go a the [Indiscernible] frankly per was servicing that'll servicing words, ServiceMac to will of once to expenses or as metrically Go more is have in now, depending on expect [Indiscernible] Willie. that's basis Mac, up the also sides. so is per this similar we’re both basis million transition a now, it other remain quarter, and where unit would we very attributable become servicing for We $XX high-quality circa of What had on of going segment why we forward down it unit for that amount

Willie Newman

It won't impact valuation. the MSR

Mark Elbaum

-- that follow-up with Fair I going thing, was was to very That same valuation. yes.

Kevin Barker

for you Thank Okay. my taking questions.

Operator

question next of line Gilbarco Sachs, please Quake comes Our with question. your with Goldman from proceed the

Unidentified Analyst

Most Hey, guys, the thanks follow-up them wanted balance quickly. on to just for answered, taking my but really of questions. were I sheet

yet. XX-K me know a out the give second, I hasn't come If you'll

was was it on just so about the It other the MSR term else? something you me XXX a lines that if And on up or can borrowings, went and it help the debt volume.

Mark Elbaum

the would down a quarters couple quite just and next in No, lines, the bit. MSR that'll paid of as that'll -- get that progress,

Unidentified Analyst

the this versus held Also, sold? were proportion MSRs, follow-up and just a the of the what's quarter on MSRs originated that

Mark Elbaum

of it, this the was quarter are that the of MSRs portfolio MSR sold all MSR. would've call created been, But So were that held. let's most

Unidentified Analysts

guys you best up luck. appreciate you I so much. my Thank of taking questions. And Understood.

Operator

question-and-answer you. turn over gentlemen, end the of Ladies remarks have Thank now Ginger the Wilcox and for call will closing I the we reached to session.

Ginger Wilcox

to earnings joining speaking questions quarterly Thank call. morning we you, any Operator look contact and me next you and to for again thanks everyone if with our for you this forward have quarter. free us Please feel

Operator

concludes a and you lines have and this conference This your Thank time. at today's your you for day. participation disconnect may wonderful

Home Point Capital (HMPT) 24 Feb 222021 Q4 Earnings call transcript