Home Point Capital Inc.
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Eastern District of Michigan on behalf of those who acquired Ocugen, Inc. (“Home Point” or the “Company”) (NASDAQ: HMPT) securities pursuant and/or traceable to the Company’s January 29, 2021, initial public offering (the “IPO” or “Offering”) between January 26, 2021 and June 21, 2021, inclusive (the “Class Period”). Investors have until August 20, 2021 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Home Point, together with its subsidiaries, operates as a residential mortgage originator and service provider. The Company operates through two segments, Origination and Servicing. The Origination segment sources loans through direct, wholesale, and correspondent channels. The Servicing segment offers collecting loan payments; remitting principal and interest payments to investors; managing 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, increasing the network from 1,623 as of December 31, 2018 to nearly 5,000 as of September 30, 2020, which represents an annualized growth rate of 88%.
In the fourth quarter of 2020, mortgage lenders industry-wide began predicting decreased gain-on-sale margins, the difference between the retail and wholesale cost of a mortgage, for the succeeding three months. According to the Fannie Mae Q4 2020 Mortgage Lender Sentiment Survey, only 19% of lenders foresaw a spike in profit margins compared to 48% in the prior quarter, 33% believed profits would hold steady, while 48% expected a decrease in 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 “Registration Statement”).
On January 29, 2021, Home Point conducted the IPO, issuing 7.25 million shares of the Company’s common stock to the public at the Offering price of $13.00 per share for proceeds of $88,123,750 to the selling stockholders before expenses and after applicable underwriting discounts and 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 “Prospectus” and, together with the Registration Statement, the “Offering Documents”).
The lawsuit alleges that the Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and was not prepared in accordance with the rules and regulations governing its preparation. Specifically, the Offering Documents made false and/or misleading statements and/or failed to disclose that: (i) Home Point’s aggressive expansion of its broker partners would dramatically increase the Company’s expenses; (ii) the mortgage industry was anticipating industry-wide decreased gain-on-sale margins as a result of rising interest rates in 2021 and Home Point would be subject to the same competitive pressures; (iii) accordingly, the Company had overstated its business and financial prospects; and (iv) as a result, the Offering Documents were materially false and/or misleading and failed to state information required to be stated 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 consensus estimates by $41.72 million. On this news, Home Point’s stock price declined by $1.66 per share, or approximately 17.7%, from $9.38 per share on May 5, 2021 to close at $7.72 per share on May 6, 2021.
At the time this Complaint was filed, Home Point’s stock price has continued to trade below the $13.00 per share Offering price, damaging investors.
If you purchased or otherwise acquired Home Point securities, have information, or would like to learn more about these claims, please contact Thomas W. Elrod of Kirby McInerney LLP at 212-371-6600, by email at firstname.lastname@example.org, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.