UWM Overtakes Rocket Mortgage to Become Largest U.S. Mortgage Lender

New markets require new approaches and new tactics.Experts and industry leaders take the stage Inman Connect New York It helps you navigate market changes and prepare for what’s next. Meet us in the moment and join us. register here.

Wholesale mortgage lender UWM Holdings Corp. cut interest rates in June to boost its market share and push third-quarter purchase-loan production to record levels before boosting its rocket mortgage to become America’s largest mortgage provider.

Rising mortgage rates have significantly curtailed the profitable refinancing business across the mortgage industry. But UWM says it has been able to attract not just homebuyers, but mortgage originators working for banks and other retailers by offering better interest rates and the latest technology.

of publication Third Quarter Earnings On Friday, UWM CEO Mat Ishbia said the mortgage brokers sending business to UWM contributed to the company’s success.

Matt Ishbia

“I didn’t know when it would be, but I knew that day would come,” Ishbia said on a conference call with investment analysts. It’s a great place to acquire and the wholesale channel is a great place for loan officers to work, which is why we are #1 as a community with brokers.”

Pontiac, Michigan-based UWM, the parent company of United Wholesale Mortgage, reported third-quarter net income of $325.6 million on revenue of $684.2 million. Net income and revenue were essentially flat year over year, both benefiting from an increase in the fair value of UWM’s mortgage servicing rights of $236.8 million.

However, UWM’s third quarter purchase loan initiations were a record $27.7 billion, surpassing Rocket Mortgage’s total loans in both purchases and refinancings. A Rocket Mortgage That Won’t Break Buy And Refinance reported on thursday Third quarter mortgage volume declined 73% from the year-ago quarter to $23.7 billion.

UWM has already announced it is on top of mortgage lending — Google “UWMand a paid ad appears at the top of search results declaring the company “The New #1 Mortgage Lender.”

Screenshot of top paid search results for “UWM” on Friday, November 4th.

UWM stockhas traded at just $2.84 over the past 12 months, as high as $7.51, but rose 20% to close at $3.71 after UWM reported its results on Friday.

UWM Posts Start of Record Buying

Source: Inman’s analysis of UWM’s regulatory filings.

UWM’s total loans in the third quarter decreased 47% year-over-year to $33.5 billion as refinancing volumes declined 84% to $5.8 billion during the same period.

However, UWM was able to increase its purchase loan production in the third quarter by 24% from the previous quarter and 4.5% from a year ago. This is an amazing feat considering that interest rates have more than doubled for him in the meantime.

“At this point, I hope everyone understands that we are consistently doing what we say,” said Ishbia. It was the best buying quarter in history, with nearly $28 billion in purchases, and the combination of brokers and real estate partners, combined with UWM’s efficiency in technology, made it a championship combination for American consumers. I believe it will.”

announced by UWM “Game On” Pricing Initiative In June, we lowered interest rates by 50 to 100 basis points (0.5 to 1 percentage point) for all loan types. Also announced in June, Boost, a new service for mortgage brokers, is a lead to help brokers stay in touch with past customers, connect with realtors, and opt-in to receive live call forwarding on his marketplace. and tools. UWM also runs his BeAMortgageBroker.com. This site was created to encourage retail loan officers and those looking to enter the mortgage business to become mortgage brokers.

“Since the launch of Game On, thousands of loan officers have experienced our technology and services for the first time and quickly realized that partnering with UWM could help them win in every market,” said Ishbia. says. “Loan officers said they will move from retail to wholesale this year and accelerate while the game is on. Estimated, about half of that comes directly from the retail channel.”

UWM also cited “multiple new loan products” as the reason for the growth. This includes temporary interest rate buybacks, stand-alone and piggybacked his HELOCs (home equity credit lines), and expanded jumbo ARM (variable rate mortgage) offerings.

The drastic cut in interest rates hit a key metric: gross profit margins, or the profits UWM makes when it resells loans to investors. UWM’s gross margin was 0.52%, down nearly in half from 0.99% in the second quarter and 0.94% a year ago.

UWM expects to lend between $19 billion and $26 billion in the fourth quarter of this year, with margins declining to a range of 40 to 70 basis points.

UWM is willing to grow at reduced margins on many of the loans it funds, but Ishbia said the company has not relaxed its underwriting standards.

“We are one of those lenders who don’t chase quantity for quality,” he said. “A lot of competitors, almost all competitors, 580 credits he’s down to the score. We don’t do that. Is not.”

In addition to lowering interest rates and introducing new loan products and technology, UWM announced another controversial initiative last year aimed at growing its business.

Ishubia took me to facebook .

UWM is criticized Over its ‘all-in’ initiative — and as both were embroiled in lawsuits defendant and plaintiff — Ishbia defended the decision to let mortgage brokers choose between partnering with UWM or their two biggest rivals.

“When we launched ‘All In’ in March 2021, we said that this decision would help us grow our brokerage channel and ultimately increase our share of the channel,” said Ishbia. I’m here. “Some people questioned us and thought we were going to lose brokers and market share. But the exact opposite happened.”

According to Ishbia, UWM’s share of wholesale channel mortgage originations has increased from 40% to 50%.

“There were a lot of unenthusiastic wholesale lenders in the market and with the game turned on, some decided to exit due to lack of efficiency and lack of commitment to the broker community,” said Ishbia. said Mr. But with over 50 wholesale his renders still in the game, he said:

get the inmans Extra Credit Newsletter Delivered directly to your inbox. A weekly roundup of the world’s biggest mortgage and closing news delivered every Wednesday. Click here to subscribe.

Email Matt Carter

Leave a Comment