United Wholesale Mortgage Bucks Industry Trend By Posting 55% Increase In Net Income In Second Quarter
United Wholesale Mortgage Holdings on Tuesday posted a net income of $215.4 million in the second quarter. This is a 55% increase from 2021.
The suburban Detroit lender also posted profits on $29.9 billion in loan origination volume for the April-to-June quarter. That was a 50% decline year-over-year, though it came in the middle of UWM’s $26 billion to $33 billion projection range shared earlier this year. Its 1% gain margin surpassed the 0.9% high end of its guidance, as well.
United Wholesale Mortgage CEO Spread The Good News
CEO Mat Ishbia said in a statement:
UWM’s scale and agility, coupled with the momentum of the broker channel drove outstanding results in the second quarter. Not only were we able to deliver strong profitability, we also continued our streak of delivering significant purchase volume.
UWM’s profit for the quarter was also greater than that of crosstown rival Rocket Companies. Rocket saw a 91% decrease in new originations.
UWM’s third-quarter production outlook is also between $23 billion and $28 billion.
The company works exclusively with brokers. UWM introduced its “Game On” pricing program to brokers at the end of June. The program decreased rates by 0.5% to 1% on all the loans it offers.
UWM’s revenue rose 16% year-over-year to $564.2 million in the second quarter.
The company also said the time it took to close a loan on average was 19 days. The company is looking to decrease that to 12 with its technology.
Refinances represented a quarter of UWM’s mix at $7.5 billion, a 79% decrease from 2021. The rest of the $22.4 billion in volume came from purchases. Purchase deals increased 7%.
CEO Mat Ishbia Charts His Own Course
Ishbia has publicly criticized lenders for laying off employees. He says UWM will not lay off workers. The lender says it now employs more than 7,000 people, which is down from more than 8,000 last quarter. A spokesperson attributed the decline to natural attrition.
Retaining servicing rights as refinances fall can offer a buffer for income during challenging times. UWM’s mortgage servicing rights totaled $308.1 billion at the end of June, up 18% year-over-year.
The company’s more than 60-day delinquency rate was at 0.69%. As a result, the company’s forbearance rate was 0.49%. The company ended March with $958.7 million in cash and cash equivalents, an 8.5% decrease. On Oct. 10, UWM will pay a quarterly dividend of 10 cents per share owned as of Sept. 20.
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