pmuolo@imfpubs.com

It was four years ago this month that nonbank mortgage giant Rocket Companies launched its initial public offering of stock, igniting a boom of sorts in originators going public. In retrospect, some of these companies should never have undertaken IPOs, but Wall Street underwriters, being the force of nature they are, had other ideas…

The good news is that two members of the IPO “Class of 2020-2021” are once again trading above their initial offering price: Rocket ($21.10 this morning v. $18.00) and Guild Holdings ($17.40 v. $15.00). Of the rest, one is no longer with us (Home Point), another (Finance of America) went through a reverse stock-split while loanDepot has seen some improvement in its share price of late ($3.08) but went public at $14.00 a unit…

And then there’s United Wholesale Mortgage, whose common trades for $9.53 compared to an IPO price of $11.00. Today, UWM is the nation’s largest home lender (it wasn’t when it went public) and the value of its common allowed CEO Mat Ishbia to buy two basketball teams. It might be said that thanks to Caitlin Clark, one of those teams, the WNBA’s Phoenix Mercury is probably worth a lot more in 2024 than it was in 2022 when Ishbia inked the deal. Clark doesn’t play for the Mercury but has elevated the popularity of the WNBA, and thus the advertising revenue…

We recently interviewed CMG Mortgage owner Chris George about the Wisconsin bank he’s buying. George said he flew into Madison in early August and saw construction cranes dotting the skyline, building apartments. Madison seemed empty to him and he wondered “where everyone was.” His hosts informed him that Madison is a college town whose population increases exponentially each fall when the undergrads return. “I had never been there before. Then I got it,” he said. George, a Californian through and through, told us: “I’m more of a film and music guy, not so much on the sports…”

Greenwoods State Bank, the depository George is buying, has offices in seven Midwestern states. One of them is Michigan, the corporate home of CMG competitors Rocket and UWM. 

Banks Reduce Servicing for Others in First Quarter

Banks handled $3.05 trillion in servicing for others as of the end of March, down 2.0% from the end of 2023. The five largest banks in terms of servicing for others all reduced their portfolios in the first quarter. Wells Fargo, the second-largest bank in terms of SFO, posted the largest decline, down 5.7% from the end of 2023. Dig deeper into company-specific results in IMF’s Mortgage Profitability Report. The report, issued quarterly, provides exhaustive bank rankings for mortgage banking earnings, mortgage sales activity and repurchases.