New York, New York – (Newsfile Corp. – June 26, 2021) – Pomerantz LLP announces that a class action lawsuit has been filed against Home Point Capital Inc. (“Home Point” or the “Company”) (NASDAQ: HMPT) and some of its leaders. The class action lawsuit, filed in the United States District Court for the Eastern District of Michigan, and registered as 21-cv-11457, is in the name of all persons and entities other than the defendants who have purchased or otherwise acquired ordinary shares of Home Point in accordance with and / or traceable to the Company’s initial public offering on January 29, 2021 (the âIPOâ or âtheâ Offer â), seeking to recover damages- compensable interest caused by Defendants’ violations of federal securities laws and to pursue remedies under Sections 11 and 15 Securities Act of 1933 (the âSecurities Actâ) (the âClassâ). The claims in this action arise from Home Point’s materially misleading offering documents (defined below) published in connection with the IPO.
If you are a shareholder who purchased Home Point common stock in accordance with and / or traceable until the Company’s initial public offering on January 29, 2021, you have until August 20, 2021 to apply to the court for appoint you as the primary applicant for the group. A copy of the complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll free, Ext. 7980. Those inquiring by e-mail are encouraged to provide their mailing address, telephone number and the number of shares purchased.
[Click here for information about joining the class action]
Home Point, along with its subsidiaries, operates as a residential mortgage lender and service provider. The Company operates in two segments, Origination and Servicing. The Origination segment sources loans through direct, wholesale and correspondent channels. The Servicing segment offers the collection of loan repayments; payment of principal and interest payments to investors; manage escrow funds for the payment of mortgage-related expenses, such as taxes and insurance; and performing loss mitigation activities on behalf of investors and administering mortgage loans.
From 2018 to 2020, Home Point undertook an aggressive expansion of its broker partner network, growing the network from 1,623 as of December 31, 2018 to nearly 5,000 as of September 30, 2020, representing an annualized growth rate of 88 %.
In the fourth quarter of 2020, mortgage lenders across the industry began to expect declining sales profit margins, the difference between the retail and wholesale cost of a mortgage, for the next three months. According to the Fannie Mae Fourth Quarter 2020 Mortgage Lender Sentiment Survey, only 19% of lenders expected profit margins to increase, up from 48% in the previous quarter, 33% believed profits would remain stable, while 48% expected profit margins to increase. ‘expected lower profits.
On January 8, 2021, Home Point filed a registration statement on Form S-1 with the SEC in connection with the IPO, which, after amendment, was declared effective on January 28, 2021 (the “Statement recording ‘).
On January 29, 2021, Home Point went public, issuing 7.25 million common shares of the Company to the public at an offering price of $ 13.00 per share for proceeds of 88,123,750. $ to selling shareholders before fees and after applicable rebates and subscription commissions.
On February 1, 2021, Home Point filed a prospectus on Form 424B4 with the SEC in connection with the IPO, which incorporated and formed part of the registration statement (the âProspectusâ and, along with the statement of ‘registration, the âOffer Documentsâ).
The complaint alleges that the offering documents were negligently prepared and, therefore, contained false statements of material facts or failed to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing its preparation. Specifically, the Offer Documents made false and / or misleading statements and / or failed to disclose that: (i) Home Point’s aggressive expansion of its broker partners would significantly increase the expenses of the Company; (ii) the mortgage industry expected industry-wide selling profit margins to decline due to rising interest rates in 2021 and Home Point would be subject to the same competitive pressures; (iii) as a result, the Company overestimated its commercial and financial prospects; and (iv) as a result, the Offer Documents were materially false and / or misleading and did not indicate the information to be included therein.
On May 6, 2021, Home Point issued a press release announcing the company’s financial results for the first quarter of 2021. Among other results, Home Point reported revenue of $ 324.2 million, missing 41 , $ 72 million at consensus estimates.
On this news, Home Point’s share price fell $ 1.66 per share, or 17.7%, to close at $ 7.72 per share on May 6, 2021.
At the time this complaint was filed, Home Point’s share price continued to trade below the offering price of $ 13.00 per share, hurting investors.
Pomerantz, with offices in New York, Chicago, Los Angeles and Paris, is recognized as one of the leading firms in the areas of corporate law, securities and antitrust litigation. Founded by the late Abraham L. Pomerantz, known as the Dean of the Class Actions Bar, Pomerantz was a pioneer in the field of securities class actions. Today, more than 80 years later, Pomerantz continues the tradition it established, fighting for the rights of victims of securities fraud, breach of fiduciary duty and corporate misconduct. The firm has recovered numerous multi-million dollar damages on behalf of the members of the group. See www.pomerantzlaw.com
Robert S. Willoughby
888-476-6529 ext 7980
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/88808