Fitch lowers Home Point

Fitch Ratings said it downgraded the long-term issuer default ratings of Home Point Capital Inc. and its subsidiary Home Point Financial Corp. to B- from B and placed them on rating watch negative.

The agency said the actions follow the company's announcement that it has entered into a definitive agreement to sell some assets of its wholesale originations channel to Loan Store, Inc. in exchange for an equity stake in the company.

Senior unsecured debt ratings were also downgraded to CCC+ from B-/RR5.

The downgrade reflects Fitch's view that this transaction represents a significant shift in Home Point's business strategy away from being a large originator and servicer of mortgage loans focused on the wholesale channel, towards a more opportunistic and evolving approach, the agency said.

Fitch said it views this as a weakening of Home Point's business model and franchise position.

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