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Driven by a desire to achieve greater scale and gain access to cheaper capital, nonbank mortgage lenders dove headfirst into the public markets during the Covid-19 boom. 

How could they resist? It was, after all, a once-in-a-lifetime opportunity for founders and private equity backers to cash in on historic origination volume. 

During the euphoria, six mortgage companies – Rocket Companies (Rocket Mortgage’s holding firm), United Wholesale Mortgage Holdings Corp., loanDepot, Guild Holdings Company, Home Point Capital (parent of wholesaler Homepoint), and Finance of America Companies – debuted on the stock market with a combined market capitalization of $69 billion, according to HousingWire estimates based on Yahoo! Finance data. 

But no one is popping the champagne these days. Executives of publicly traded nonbank mortgage lenders will instead have to sooth the fears of their investors in 2022, a consequence of the cyclical inevitability of higher rates, lower refinance volumes, and fiercer-than-ever competition, according to analysts who cover the sector. 

The six companies that went public over the last two years have, in the aggregate, lost around $36 billion in combined market cap value since the first nonbank, Rocket, debuted on the market in the summer of 2020, according to an analysis of stock values by HousingWire.