Mr. Cooper completes acquisition of Home Point Capital
National Mortgage News
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Mr. Cooper on Tuesday reported that it closed its acquisition of Home Point Capital through a vehicle called Heisman Merger Sub following the expiration of a final tender offer. Roughly 98.5% of HPC's shares were tendered prior to the expiration, and all conditions of the offer were satisfied, according to a press release issued by Mr. Cooper. The deal adds around $83 billion in mortgage servicing rights to the acquiring company's portfolio, bringing it a lot closer to Chairman and CEO Jay Bray's goal to make Mr. Cooper a $1 trillion servicer. It also includes the assumption of $500 million in bonds that have "an attractive rate," Vice Chairman and President Chris Marshall said in the press release.
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Two Harbors Investment, while profitable using standard accounting rules, lost $3.7 million or 4 cents per share in the second quarter using earnings available for distribution, because of hedging activities. EAD is a non-GAAP method common among real estate investment trusts. So far in the current earnings cycle, PennyMac Financial also noted its results were reduced because of the impact of hedging losses on its servicing portfolio. For the period Two Harbors had GAAP net income of $187.8 million. Both are opposite where they were in the first quarter, in which Two Harbors had an EAD profit of $8.3 million but a GAAP loss of $189.2 million.
Freddie Mac's second quarter earnings increased due to a release of money set aside for credit losses in the single-family business. But the government-sponsored enterprise had to boost its provision for multifamily mortgages as a result of problems in its senior housing portfolio. The McLean, Virginia-based company earned $2.9 billion for the most recent quarter, compared with just under $2 billion three months prior and $2.4 billion for the second quarter of 2022. Fannie Mae's second quarter results similarly benefitted from a release of reserves, in that case by $1.3 billion.
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Home price growth could reach a crescendo in the next six months, CoreLogic predicts. Property values rose 4.8% since the beginning of the year, and are up 1.6% in June from the same time last year, according to the analytics firm's Home Price Index and HPI Forecast. Growth was uneven across the country's biggest metros, CoreLogic found, but the median single-family home price in June was steep at $376,000. "While the continued imbalance between buyers and sellers continues to pressure home prices, June's annual bump in price growth echoes economic resiliency, a thriving U.S. job market and strong consumer spending," said Selma Hepp, chief economist for CoreLogic, in a press release.?
Mortgage application volumes dropped across the board last week, as loan activity remained largely muted due to the ongoing inventory shortage, according to the Mortgage Bankers Association. The MBA's seasonally adjusted Market Composite Index, a measure of weekly application volume based on surveys of the trade group's members, declined 3% for the seven-day period ending July 28, sliding downward for the second straight week. Compared to the same survey period in 2022, volumes were 28.1% lower. The conforming average rose, as the Federal Reserve again upped the federal funds rate as widely expected.
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