United Wholesale Mortgage (UWM) continues to fight against the tide in the third quarter, reporting earnings of $29.7 billion in loan originations and overall strong financials in their recent earnings report.
The company saw a large net loss in Q1, coming in at $138.6 million, but executives have remained steadfast that the company would turn the corner. As of Q2, executives’ hopes had come true, and UWM began building business back up.
While numbers are down a bit from Q2, which is to be expected with mortgage rates currently hovering near 8%, overall there are no losses, and all financials are in the black.
“Despite about a 25-year high in mortgage rates and lower housing inventory, we continue to thrive in all aspects of the business, including having one of our best purchase quarters of all time,” said Mat Ishbia, chairman and CEO of UWM. “And actually, in fact, I think we made more money this quarter than many of our competitors that are refi-focused have made all year, or even five or six quarters’ worth. That’s how strong our business is right now.”
The Q3 numbers:
- Total loan originations of $29.7 billion, down from $31.8 billion in Q2 and $33.5 billion last year.
- Purchase originations of $25.9 billion, down from $28 billion in Q2 and $27.7 billion last year.
- Net income of $301 million, up from $228.8 million in Q2 and down from $325.6 million last year. This is inclusive of a $92.9 million markup of their MSR portfolio.
- Adjusted EBITDA of $112.1 million, down from $125.4 million in Q2 and up from $1.4 million last year.
- Total equity of $3.1 billion, up from $2.9 billion in Q2 and down from $3.4 billion last year.
- Ended Q3 2023 with approximately $2.9 billion of available liquidity, including $0.9 billion of cash and self-warehouse, and $2 billion of available borrowing capacity—which includes $1.5 billion under lines of credit secured by agency and Ginnie Mae MSRs, and $500 million under an unsecured line of credit.
UWM executives attribute their continued success to their ability to shift with the market and their focus on being “best lender rather than the biggest.”
Some of the improvements and changes made with this focus in mind include:
- Investor Flex has been expanded to offer four loan options, up to $2M for purchases and refinances.
- Independent mortgage brokers now have access to improved pricing on loans under $200,000 and removed loan-level pricing adjustments on loans under $100,000.
- Expanded Safe Check to now include government and jumbo loans, as well as conventional loans.
- Launched Safe Check Complete, allowing brokers to order a pre-qualification based on a three-bureau soft credit check for $23.
- Accepting FHA/VA loans with FICOs above 580 (had previously been at 620).
UWM executives anticipate Q4 production to be in the $19 to $26 billion range, and anticipate full year 2023 production to be in the $103 to $110 billion range.
“We certainly recognize that many in the industry are facing challenges. With that said, UWM will continue to embrace this cycle as a time for purchase dominance and investment in our future. We are not resting on any laurels, nor are we relaxing. We will continue to stay on offense while much of the industry is on defense,” Ishbia concluded.