UWM shares fall on first day of trading; Home Point sets IPO target
Pontiac mortgage lender United Wholesale Mortgage Holdings Corp.'s shares closed down on their first day trading on the New York Stock Exchange, and competitor Home Point Capital Inc. in Ann Arbor shared details on its own initial public offering.
UWMC shares closed down 1.65% on Friday, while market indexes were mixed. It completed on Thursday its $16.1 billion merger with a special-purpose acquisition company affiliated with the business of Alec Gores, brother to the Detroit Pistons owner. The stock closed at $11.35. But that is up 14% from the March IPO of the company with which UWM merged.
Meanwhile, Home Point took another step forward, saying it will offer publicly 12.5 million common shares on the Nasdaq from its stakeholders at a price between $19 and $21 per share under the ticker "HMPT."
That is slightly higher than the $18 per share public offering that Detroit's Rocket Companies Inc., the No. 1 mortgage originator in the United States, made in August on the New York Stock Exchange. Rocket's stock was trading around $19.90 on Friday. Originally, the company had expected to price its IPO between $20 to $22, but decreased it after a roadshow with investors.
The stampede of mortgage lenders from southeast Michigan and elsewhere going public come as U.S. home sales in 2020 reached a 14-year high, the National Association of Realtors said Friday, amid record-low interest rates and increasing demand from remote working due to the COVID-19 pandemic.
UWM is the country's second-largest originator and the largest wholesale lender, selling mortgages exclusively through local brokers. Its combination will infuse it with $895 million net of expenses to grow the company, invest in new technologies to make the home buying process more efficient and educate buyers about brokers, who make up slightly more than 20% of the market right now.
"Nobody wants a mortgage closing to take 45 days or even 30 days," Mat Ishbia, UWM's CEO who is poised to become a billionaire as his family retains 94% of company ownership, said this week. He touted UWM can close a mortgage in 16 days. "They want it fast, easy, and efficient, and that's what we focus on."
Rocket Companies, which does some wholesale lending but mostly sells mortgages directly to consumers, received $1.8 billion from its public endeavor. Chairman Dan Gilbert maintained a 79% controlling stake in the company.
Meanwhile, Home Point will not receive any net proceeds from the sale of its common stock by the selling stockholders. Like UWM Home Point also is a mostly wholesale lender. It says it is the third-largest wholesale lender and 10th largest nonbank lender in the country after its founding in 2015.
Home Point closed $38 billion in volume through the third quarter of 2020. UWM closed $127.8 billion in production, and Rocket closed $213 billion.