GlobeNewswire Inc | Aug 10, 2021 06:00AM EDT

August 10, 2021

Quarterly Origination Volume of More Than $25 Billion, Up 116% Year-Over-Year Broker Partner Growth of 55% Year-Over-Year

ANN ARBOR, Mich., Aug. 10, 2021 (GLOBE NEWSWIRE) -- Home Point Capital Inc. (NASDAQ: HMPT) (Home Point Capital or the Company), the parent entity of Home Point Financial Corporation (Homepoint), today announced its financial results for the second quarter ended June 30, 2021.

During the second quarter we were confronted with a challenging operating environment caused by significant competitive pressure and volatility in the capital markets. These challenges led to a sequential decrease in quarterly revenues resulting in a net loss of $73 million for the second quarter, said Willie Newman, President and Chief Executive Officer. We continue to execute on our core originations strategy where we are focused on growing our broker partner network, increasing partner wallet share and retaining our growing servicing customer base. In addition, we have been accelerating productivity and efficiency initiatives, and increasing our non-agency capital markets activities. We exited the second quarter as a stronger company that is better positioned to build sustainable long-term value for our stakeholders, and we have already begun to see the benefits of our focus and acceleration.

Second Quarter 2021 Financial and Key Performance Indicator Summary

($mm, except per share values) For the quarter ended 6/30/2021 3/31/2021 6/30/2020 Total Funded Origination Volume $ 25,466 $ 29,426 $ 11,767 Total Fallout Adjusted Lock 20,365 23,553 13,456 Volume Gain on sale margin (bps)^1,2 58 147 280 Servicing portfolio - Units 449,029 396,641 285,353 Servicing portfolio - UPB $ 124,259 $ 105,821 $ 66,902 Total revenue, net $ 84.4 $ 422.0 $ 345.0 Origination segment direct 138.0 157.8 72.1 expenses Servicing segment direct 18.8 18.7 15.5 expenses Corporate expenses 41.2 50.5 30.8 Total expenses 198.0 227.0 118.4 Net income (loss) (73.2 ) 149.0 169.0 Net income (loss) per share^3 $ (0.53 ) $ 1.07 $ 1.22 (1) Gain on sale margin for the quarter ended June 30, 2021 includes approximately $33 million of adjustments largely related to agency pricing and product actions during the quarter. (2) Calculated as gain on sale divided by Fallout Adjusted Lock Volume. Gain on sale includes gain on loans, net, loan fee income, interest income (expense), net, and loan servicing fees (expense) for the Origination segment. (3) On January 21, 2021, Home Point Capital effected a stock split of its outstanding common stock pursuant to which the 100 outstanding shares were split into 1,388,601.11 shares each, for a total of 138,860,103 shares of outstanding common stock. As a result, all amounts relating to per share amounts have been retroactively adjusted to reflect this stock split.

Second Quarter 2021 Highlights

-- Quarterly funded origination volume more than doubled to $25 billion, compared to $12 billion in the second quarter of 2020 and compared to $29 billion in the first quarter of 2021. -- Total revenue, net of $84 million, compared to $345 million in the prior year quarter and $422 million in the first quarter of 2021. Revenue for the second quarter of 2021 was adversely impacted by significant competitive pressure and agency pricing and product actions. -- Total revenue in the Origination segment of $117 million compared to $377 million in the second quarter of 2020 and $347 million in the first quarter of 2021. Gain on sale margin attributable to channels, before giving effect to the impact of capital markets and other activity, was 74 basis points in the second quarter, versus 244 basis points in the second quarter of 2020 and 125 basis points in the prior quarter. Gain on sale margin in the second quarter of 2021 includes approximately $33 million of adjustments largely relating to agency pricing and product actions during the quarter, which directly impacted loan commitments that had been locked but not yet closed. -- Net loss of $73 million (or $(0.53) per share), compared to net income of $169 million (or $1.22 per share) year-over-year, and compared to net income of $149 million (or $1.07 per share) in the first quarter of 2021. The net loss in the second quarter was primarily due to lower Origination segment revenue as a result of competitive pressure, agency pricing and product actions, and a $29 million reduction in the mark-to-market fair value, net of hedge, of the mortgage servicing rights portfolio. -- Broker Partners increased by 2,400 to 6,738 as of June 30, 2021 from the end of the second quarter of 2020, and increased by 715 from the end of the first quarter of 2021. -- Servicing customers reached 449,029 at the end of the second quarter of 2021, a 57% increase from the end of the second quarter of 2020, and a 13% increase at the end of the first quarter of 2021. -- Servicing portfolio unpaid principal balance (UPB) totaled $124.3 billion as of June 30, 2021, up 86% from the end of the second quarter of 2020, and up 17% from the end of the first quarter of 2021.

Origination Segment

Home Point Capitals Origination segment originates and sells residential real estate mortgage loans. These loans are sourced through three channels. The primary channel is Wholesale, where the Company works with mortgage brokerages to source new customers. In the Correspondent channel, customers are acquired through a network of mortgage banks and financial institutions. The Direct channel retains serviced customers in the Home Point Capital ecosystem.

The Origination segment generated a contribution margin of $(21) million in the second quarter of 2021, compared to $304 million in the second quarter of 2020 and $189 million in the first quarter of 2021.

Origination Segment Financial Highlights and Summary of Key Performance Indicators

($mm) For the quarter ended 6/30/2021 3/31/2021 6/30/2020 Gain on $ 75.0 $ 301.2 $ 356.9 loans, net Loan fee 39.5 44.1 20.4 income Loan servicing - (0.0 ) (1.7 ) fees Interest 2.7 1.3 1.0 income, net Total Origination segment 117.2 346.6 376.6 revenue Directly attributable (138.0 ) (157.8 ) (72.5 ) expense Contribution $ ) $ $ margin (20.8 188.8 304.0 Key For the quarter ended Performance Indicators^1 6/30/2021 3/31/2021 6/30/2020

Total Funded Origination $ 25,466 $ 29,426 $ 11,767 Volume Total Fallout Adjusted Lock $ 20,365 $ 23,553 $ 13,456 Volume Gain on Sale Margin (bps)^ 58 147 280 2,3 Origination Volume by Purpose: Purchase 35.2 % 20.4 % 30.7 % 64.8 % 79.6 % 69.3 % Refinance Third Party Partners: Number of Broker 6,738 6,023 4,338 Partners Number of 642 620 580 Correspondent Partners (1) See Appendix for additional volume and gain on sale information by channel. (2) Gain on sale margin for the quarter ended June 30, 2021 includes approximately $33 million of adjustments largely related to agency pricing and product actions during the quarter. (3) Calculated as gain on sale divided by Fallout Adjusted Lock Volume. Gain on sale includes gain on loans, net, loan fee income, interest income (expense), net, and loan servicing fees (expense) for the Origination segment.

Servicing Segment

Home Point Capitals Servicing segment generates revenue through contractual fees earned by performing daily administrative and management activities for mortgage loans that were primarily sourced by the Companys Originations segment. These loans are serviced on behalf of investors/guarantors, primarily Fannie Mae, Freddie Mac and Ginnie Mae.

The Servicing segment generated a contribution margin of $(40) million in the second quarter of 2021, compared to $(42) million in the second quarter of 2020 and $65 million in the first quarter of 2021. Servicing Segment Financial Highlights and Key Performance Indicators

($mm) For the quarter ended 6/30/2021 3/31/2021 6/30/2020 Gain on loans, $ 0.0 $ - $ - net Loan servicing 85.6 70.3 44.0 fees Interest 0.4 0.3 1.3 income, net Other income 0.0 0.1 0.1 Total Servicing segment revenue 86.1 70.7 45.3 Directly attributable (18.8 ) (18.7 ) (15.5 ) expense Primary Margin 67.3 52.0 29.8 Change in MSR fair value: (77.7 ) (89.2 ) (41.1 ) amortization Adjusted contribution (10.4 ) (37.2 ) (11.3 ) margin Change in MSR fair value: (29.2 ) 102.1 (31.1 ) mark-to-market, net of hedge Contribution $ (39.6 ) $ $ (42.4 ) margin 64.9 Key Performance For the quarter ended^1 Indicators 6/30/2021 3/31/2021 6/30/2020 MSR servicing $ 124,259 $ 105,821 $ 66,902 portfolio - UPB Average MSR servicing $ 106,268 $ 97,049 $ 59,751 portfolio - UPB MSR servicing 449,029 396,641 285,353 portfolio - Units Weighted average coupon 3.09 % 3.19 % 3.79 % rate 60+ days delinquent, 1.6 % 2.7 % 7.8 % incl. forbearance 60+ days delinquent, 1.3 % 1.0 % 1.4 % excl. forbearance MSR 3.7x 3.8x 2.5x multiple (1) Figures as of period end, except "Average MSR servicing portfolio - UPB" which is average for the period.

Balance Sheet and Liquidity Highlights

Home Point Capital had available liquidity of $482 million as of June 30, 2021, comprising $210 million of cash and cash equivalents and $263 million of undrawn capacity from mortgage servicing rights lines of credit and other credit facilities. The Companys warehouse capacity of $7.1 billion as of June 30, 2021 increased from $6.4 billion as of March 31, 2021.

($mm) As of 6/30/2021 3/31/2021 6/30/2020 Cash and cash equivalents $ 209.9 $ 219.3 $ 127.4 Mortgage servicing rights (at fair 1,267.3 1,156.4 499.8 value) Warehouse lines of credit 5,057.6 4,847.4 1,767.5 Term debt and other borrowings, 1,166.5 888.4 348.9 net Total shareholders' equity 709.3 782.3 633.1

Dividend

Home Point Capitals board of directors has declared a cash dividend of $0.15 per share on its common stock for the second quarter ended June 30, 2021. This dividend will be paid on or about August 26, 2021 to holders of record at the close of business on August 20, 2021. Conference Call and Webcast

Members of Home Point Capitals management team will host a conference call and live webcast on Tuesday, August 10, 2021 at 8:30 a.m. ET to review the Companys financial results for the second quarter ended June 30, 2021.

The conference call may be accessed by dialing (877) 423-9813 (toll-free) or (201) 689-8573 (international), using the passcode 13721044. The number should be dialed at least ten minutes prior to the start of the call. A simultaneous webcast will also be available and can be accessed through the Investor Relations section of Home Point Capitals website at investors.homepoint.com.

An investor presentation will be referenced during the call, and it will be available prior to the call through the Investor Relations section of Home Point Capitals website.

A telephonic replay of the call will be available approximately two hours after the live call through Tuesday, August 17, 2021 by dialing (844) 512-2921 (toll-free) or (412) 317-6671 (international), passcode 13721044. To access a replay of the webcast, please visit Events in the Investor Relations section of Home Point Capitals website.

About Home Point Capital

Home Point Capital is the parent company of Homepoint, one of the nations leading mortgage originators and servicers, as well as wholly owned subsidiaries Home Point Mortgage Acceptance Corporation and Home Point Asset Management. Home Point Capitals primary business entity, Homepoint, puts people front and center of the homebuying and homeownership experience. The Company supports successful homeownership as a crucial element of broader financial security and well-being through delivering long-term value beyond the loan. Founded in 2015 and headquartered in Ann Arbor, Michigan, Homepoint works with a nationwide network of more than 6,500 mortgage broker and correspondent partners with deep knowledge and expertise about the communities and customers they serve. Today, Homepoint is the nations third-largest wholesale mortgage lender and the 7th-largest non-bank mortgage lender.

Home Point Financial Corporation d/b/a Homepoint. NMLS No. 7706 (For licensing information, go to: nmlsconsumeraccess.org). Home Point Financial Corporation does not conduct business under the name, "Homepoint" in IL, KY, LA, MD, NY, or WY. In these states, the company conducts business under the full legal name, Home Point Financial Corporation, 2211 Old Earhart Road, Suite 250, Ann Arbor, MI 48105. Toll-Free Tel: 888-616-6866.

Forward Looking Statements

This press release contains certain forward-looking statements, as that term is defined in the U.S. federal securities laws, including the Private Securities Litigation Reform Act of 1995. In addition, from time to time, the Company or its representatives have made, or may make, forward-looking statements orally or in writing. These forward-looking statements include, but are not limited to, statements other than statements of historical facts, including among others, statements relating to the Companys future financial performance, the Companys business prospects and strategy, anticipated financial position, liquidity and capital needs, the industry in which the Company operates and other similar matters. Words such as anticipates, expects, intends, plans, predicts, believes, seeks, estimates, could, would, will, may, can, continue, potential, should and the negative of these terms or other comparable terminology often identify forward-looking statements. These forward-looking statements, , which are based on currently available information, operating plans, and projections about events and trends, are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. Factors, risks, and uncertainties that could cause actual outcomes and results to be materially different from those contemplated by forward-looking statements include, among others: the spread of the COVID-19 outbreak and severe disruptions in the U.S. and global economy and financial markets it has caused; our reliance on our financing arrangements to fund mortgage loans and otherwise operate our business; the dependence of our loan origination and servicing revenues on macroeconomic and U.S. residential real estate market conditions; counterparty risk; the requirement to make servicing advances that can be subject to delays in recovery or may not be recoverable in certain circumstances; competition for mortgage assets that may limit the availability of desirable originations, acquisitions and result in reduced risk-adjusted returns; our ability to continue to grow our loan origination business or effectively manage significant increases in our loan production volume; competition in the industry in which we operate; our success and growth of our production and servicing activities and the dependence upon our ability to adapt to and implement technological changes; the effectiveness of our risk management efforts; our ability to detect misconduct and fraud; any cybersecurity risks, cyber incidents and technology failures; our vendor relationships; our failure to deal appropriately with various issues that may give rise to reputational risk, including legal and regulatory requirements; ; risks and uncertainties associated with litigation, including any employment, intellectual property, consumer protection, class action and other litigation matters, and related unfavorable publicity; exposure to new risks and increased costs as a result of initiating new business activities or strategies or significantly expanding existing business activities or strategies; the impact of changes in political or economic stability or in government policies on our material vendors with operations in India; the impact of interest rate fluctuations; risks associated with hedging against interest rate exposure; the impact of any prolonged economic slowdown, recession or declining real estate values; risks associated with financing our assets with borrowings; risks associated with a decrease in value of our collateral; the dependence of our operations on access to our financing arrangements; risks associated with the financial and restrictive covenants included in our financing agreements; risks associated with higher risk loans that we service; risks associated with derivative financial instruments; our ability to foreclose on our mortgage assets in a timely manner or at all; our ability to obtain and/or maintain licenses and other approvals in those jurisdictions where required to conduct our business; legislative and regulatory changes that impact the mortgage loan industry or housing market; and changes in regulations or the occurrence of other events that impact the business, operations or prospects of government agencies or such changes that increase the cost of doing business with such entities. You should carefully consider the foregoing factors and the other risks and uncertainties that may affect the Companys business, including those described in documents filed from time to time by the Company with the Securities and Exchange Commission. Many of the important factors that will determine these results are beyond our ability to control or predict. Youare cautioned not to put undue reliance on any forward-looking statements, which speak only as of the date thereof. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements.

Consolidated Statements of Income (Loss)($ in millions, except per share data) (Unaudited)

($mm, except per share For the quarter ended values) 6/30/2021 3/31/2021 6/30/2020 Gain on loans, $ 75.0 $ 301.2 $ 356.9 net Loan fee 39.5 44.1 20.4 income Interest 34.6 25.6 11.8 income Interest (44.1 ) (32.9 ) (14.4 ) expense Interest (9.5 ) (7.4 ) (2.6 ) (expense), net Loan servicing 85.6 70.3 42.3 fees Change in FV (106.9 ) 12.8 (72.2 ) of MSR Other income 0.7 0.8 0.3 Total revenue, net 84.4 422.0 345.0 Compensation 127.3 153.6 81.3 and benefits Loan expense 17.5 22.4 7.6 Loan servicing 7.5 8.1 8.3 expense Production 8.2 8.6 5.0 technology General and 26.5 22.2 11.9 administrative Depreciation and 2.4 2.8 1.4 amortization Other expense 8.6 9.3 2.8 Total Expenses 198.0 227.0 118.4 Pre-tax income ) (113.6 194.9 226.7 Pre-tax NM 46 % 66 % margin Income tax expense (27.2 ) 50.1 59.5 (benefit) Income from equity method 13.2 4.2 1.9 investment Net income $ (73.2 ) $ $ (loss) 149.0 169.0 Net margin NM 35 % 49 % Basic and diluted earnings per share^1: Basic net income (loss) $ (0.53 ) $ 1.07 $ 1.22 per share Diluted total net income (0.52 ) 1.06 1.22 (loss) per share Basic weighted average common stock 138.9 138.9 138.9 outstanding (mm) Diluted weighted average common 140.5 139.7 139.1 stock outstanding (mm) Adjusted income statement metrics^2: Adjusted $ 126.8 $ 324.1 $ 378.0 revenue Adjusted (51.0 ) 72.7 192.0 net income Adjusted net NM 22 % 51 % margin (1) On January 21, 2021, Home Point Capital effected a stock split of its outstanding common stock pursuant to which the 100 outstanding shares were split into 1,388,601.11 shares each, for a total of 138,860,103 shares of outstanding common stock. As a result, all amounts relating to per share amounts have been retroactively adjusted to reflect this stock split. (2) Non-GAAP measures. See non-GAAP reconciliation for a reconciliation of each measure to the nearest GAAP measure.

Consolidated Balance Sheets($ in millions) (Unaudited)

($mm) As of 6/30/2021 3/31/2021 6/30/2020 Assets: Cash and cash $ 209.9 $ 219.3 $ 127.4 equivalents Restricted 43.0 41.9 48.9 cash Cash and cash equivalents 252.9 261.1 176.3 and Restricted cash Mortgage loans held 5,412.5 5,191.3 1,904.2 for sale (at fair value) Mortgage servicing 1,267.3 1,156.4 499.8 rights (at fair value) Property and equipment, 23.4 23.0 15.6 net Accounts receivable, 177.4 290.6 45.2 net Derivative 125.2 186.9 244.1 assets Goodwill and 10.8 10.8 10.8 intangibles GNMA loans eligible for 988.2 1,446.5 2,351.2 repurchase Other assets 112.1 103.9 77.1 Total $ 8,369.7 $ 8,670.4 $ 5,324.3 assets Liabilities and Shareholders' Equity: Warehouse lines of $ 5,057.6 $ 4,847.4 $ 1,767.5 credit Term debt and other 1,166.5 888.4 348.9 borrowings, net Accounts payable and 146.1 196.5 78.2 accrued expenses GNMA loans eligible for 988.2 1,446.5 2,351.2 repurchase Other 301.8 509.2 145.4 liabilities Total liabilities 7,660.3 7,888.1 4,691.2 Shareholders' Equity: Common stock - - - Additional paid in 520.5 69.5 517.7 capital Retained 188.8 712.8 115.4 earnings Total shareholders' 709.3 782.3 633.1 equity Total liabilities and $ 8,369.7 $ 8,670.4 $ 5,324.3 shareholders' equity



Volume and Margin Detail by Channel

($mm) For the quarter ended 6/30/2021 3/31/2021 6/30/2020 Funded Origination Volume by Channel Wholesale $ 18,380 $ 19,668 $ 7,844 5,695 8,243 3,491 Correspondent Direct 1,391 1,514 432 Total Funded Origination $ 25,466 $ 29,426 $ 11,767 Volume Fallout Adjusted Lock Volume by Channel Wholesale $ 15,566 $ 16,140 $ 8,171 3,963 6,673 4,694 Correspondent Direct 740 836 591 Total Fallout Adjusted Lock $ 20,365 $ 23,553 $ 13,456 Volume GAIN ON SALE MARGIN DETAIL BY CHANNEL ($mm) For the quarter ended 6/30/2021 3/31/2021 6/30/2020 $ Amount Basis Points $ Amount Basis Points $ Amount Basis Points Gain on Sale Margin by Channel Wholesale $ 114.5 74 $ 245.1 152 $ 252.5 309 9.3 23 22.2 33 50.2 107 Correspondent Direct 26.3 315 26.8 362 25.9 439 Margin Attributable 150.1 74 294.0 125 328.6 244 to Channels Other Gain (Loss) (32.9 ) NA 52.7 NA 47.9 NA on Sale^1 Gain on Sale Margin^ $ 117.2 58 $ 346.6 147 $ 376.6 280 2,3 (1) Includes interest income (expense), net, realized and unrealized gains (losses) on locks and mortgage loans held for sale, net hedging results, the provision for the representation and warranty reserve, and differences between modeled and actual pull-through. (2) Gain on sale margin for the quarter ended June 30, 2021 includes approximately $33 million of adjustments largely related to agency pricing and product actions during the quarter. (3) Calculated as gain on sale divided by Fallout Adjusted Lock Volume. Gain on sale includes gain on loans, net, loan fee income, interest income (expense), net, and loan servicing fees (expense) for the Origination segment.

Summary Segment Results

($mm) For the quarter June 30, 2021 Origination Servicing Segments Total All Other Total Reconciliation Item^1 Segments Total Revenue: Gain on $ 75.0 $ - $ 75.0 $ 0.0 $ 75.0 $ - $ 75.0 loans, net Loan fee 39.5 - 39.5 - 39.5 - 39.5 income Loan servicing - 85.6 85.6 - 85.6 - 85.6 fees Change in FV of MSRs, - (106.9 ) (106.9 ) - (106.9 ) - (106.9 ) net Interest income 2.7 0.4 3.1 (12.6 ) (9.5 ) - (9.5 ) (loss), net Other - - - 13.8 13.8 (13.2 ) 0.6 income Total $ $ ) $ $ $ $ (13.2 ) $ 84.3 Revenue 117.2 (20.9 96.3 1.2 97.5 Contribution $ ) $ ) $ ) $ (40.0 ) $ ) $ $ margin (20.8 (39.6 (60.4 (100.4 - - ($mm) For the quarter March 31, 2021 Origination Servicing Segments Total All Other Total Reconciliation Item^1 Segments Total Revenue: Gain on $ 301.2 $ - $ 301.2 $ - $ 301.2 $ - $ 301.2 loans, net Loan fee 44.1 - 44.1 - 44.1 - 44.1 income Loan servicing - 70.3 70.3 - 70.3 - 70.3 fees Change in FV of MSRs, - 12.8 12.8 - 12.8 - 12.8 net Interest income 1.3 0.3 1.5 (8.9 ) (7.4 ) - (7.4 ) (loss), net Other - 0.1 0.1 4.8 5.0 (4.2 ) 0.8 income Total $ $ $ $ ) $ $ (4.2 ) $ 421.9 Revenue 346.6 83.5 430.1 (4.1 426.1 Contribution $ $ $ $ (54.6 ) $ $ $ margin 188.8 64.9 253.8 199.2 - - ($mm) For the quarter June 30, 2020 Origination Servicing Segments Total All Other Total Reconciliation Item^1 Segments Total Revenue: Gain on $ 356.9 $ - $ 356.9 $ - $ 356.9 $ - $ 356.9 loans, net Loan fee 20.4 - 20.4 - 20.4 - 20.4 income Loan servicing (1.7 ) 44.0 42.3 - 42.3 - 42.3 fees Change in FV of MSRs, - (72.2 ) (72.2 ) - (72.2 ) - (72.2 ) net Interest income 1.0 1.3 2.2 (4.8 ) (2.6 ) - (2.6 ) (loss), net Other 0.0 0.1 0.1 2.1 2.2 (1.9 ) 0.3 income Total $ $ ) $ $ ) $ $ (1.9 ) $ 345.1 Revenue 376.6 (27.0 349.7 (2.7 346.9 Contribution $ $ ) $ $ (33.1 ) $ $ $ margin 304.0 (42.4 261.6 228.5 - - (1) The Company includes the income from its equity method investments in the All Other category. In order to reconcile to Total net revenue on the condensed consolidated statements of operations, it must be removed as is presented above.

GAAP to Non-GAAP Reconciliations

RECONCILIATION OF ADJUSTED REVENUE TO TOTAL REVENUE, NET ($mm) For the quarter ended 6/30/2021 3/31/2021 6/30/2020 Total revenue, net $ 84.4 $ 422.0 $ 345.0 Income from equity method 13.2 4.2 1.9 investment Change in fair value of 29.2 (102.1 ) 31.1 MSR, net of hedge Adjusted revenue $ 126.8 $ 324.1 $ 378.0 RECONCILIATION OF ADJUSTED NET INCOME TO TOTAL NET INCOME (LOSS) ($mm) For the quarter ended 6/30/2021 3/31/2021 6/30/2020 Total net income (loss) $ (73.2 ) $ 149.0 $ 169.0 Change in fair value of 29.2 (102.1 ) 31.1 MSR, net of hedge Income tax effect of change in fair value of MSR, net (7.0 ) 25.7 (8.2 ) of hedge Adjusted net income $ (51.0 ) $ 72.7 $ 192.0 RECONCILIATION OF ADJUSTED NET MARGIN TO NET MARGIN ($mm) For the quarter ended 6/30/2021 3/31/2021 6/30/2020 Total revenue, net $ 84.4 $ 422.0 $ 345.0 Total net income (loss) (73.2 ) 149.0 169.0 Net margin NM 35 % 49 % Adjusted revenue $ 126.8 $ 324.1 $ 378.0 Adjusted net income (51.0 ) 72.7 192.0 Adjusted net margin NM 22 % 51 %

Non-GAAP Financial Measures

To provide investors with information in addition to our results as determined under Generally Accepted Accounting Principles (GAAP), we disclose Adjusted revenue, Adjusted net Income, and Adjusted net margin as non-GAAP measures, which management believes provide useful information to investors. These measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for revenue, net income, or any other operating performance measure calculated in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies.

We define Adjusted revenue as Total net revenue exclusive of the impact of the change in fair value of MSRs related to changes in valuation inputs and assumptions, net of MSRs hedge and adjusted for Income from equity method investment.

We define Adjusted net income as Net income (loss) exclusive of the impact of the change in fair value of MSRs related to changes in valuation inputs and assumptions, net of MSRs hedge.

We exclude changes in fair value of MSRs, net of hedge from each of Adjusted revenue and Adjusted net income (loss) as they add volatility and are not indicative of the Companys operating performance or results of operation. This adjustment does not include changes in fair value of MSRs due to realization of cash flows, which remain in each of Adjusted revenue and Adjusted net income (loss). Realization of cash flows occurs when cash is collected as customers make scheduled payments, partial prepayments of principal, or pay their mortgage in full.

We define Adjusted net margin by dividing Adjusted net income by Adjusted revenue.

We believe that the presentation of Adjusted revenue, Adjusted net Income, and Adjusted net margin provides useful information to investors regarding our results of operations because each measure assists both investors and management in analyzing and benchmarking the performance and value of our business. Adjusted revenue, Adjusted net Income, and Adjusted net margin provide indicators of performance that are not affected by fluctuations in certain costs or other items. Accordingly, management believes that these measurements are useful for comparing general operating performance from period to period, and management relies on these measures for planning and forecasting of future periods. The Company measures the performance of the segments primarily on a contribution margin basis. Additionally, these measures allow management to compare our results with those of other companies that have different financing and capital structures. However, these measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for net income, or any other operating performance measure calculated in accordance with GAAP and may not be comparable to a similarly titled measure reported by other companies.

Investor Relations Contact:

Home Point Capital: Gary Stein investor@hpfc.com(734) 205-9680

Media Contacts:

Home Point Capital: Brad Pettiford media@hpfc.com

Haven Tower for Home Point Capital: homepoint@haventower.com