Despite recent housing market challenges, United Wholesale Mortgage (United) overtook Rocket Mortgage and became the No. 1 overall mortgage originator in Q3 2022, according to company officials.
“There has never been a 100% wholesale lender that has earned this title, and we are very proud to be No. 1,” shared Chairman and CEO Mat Ishbia.
The company’s latest earnings report put them at a net income of $325.6 million compared to $215.4 million of net income from last quarter and $329.9 million of net income from last year. This was also inclusive of a $236.8 million increase in fair value of MSRs. Year to date, United’s net income is at approximately $1 billion.
Total loan origination was at $33.5 billion, up from $29.9 billion last quarter and down from $63 billion last year. This included $27.7 in purchase originations, which United shared was their best purchase quarter in their history. This metric was also a 24% increase from last quarter and a 5% increase from last year. Additionally, United reported a total gain margin of 52 bps, down from 99 last quarter and 94 last year, and a total equity of $3.4 billion, up from $3.2 billion last quarter and $3 billion last year.
“Our servicing portfolio also remains very strong, with a total UPB of approximately $306 billion, as newly originated and retained MSRs have largely kept pace with sales and payoffs to date in 2022,” said Andrew Hubacker, United’s senior vice president, chief accounting officer and interim principal financial officer. “With a very low WAC, very low delinquencies and a high asset quality, our MSR portfolio is stronger than ever and continues to provide balance to our business model, a recurring quarterly cash flow stream and a strategic source of additional liquidity.”
All in all, United ended Q3 2022 with approximately $2.9 billion of available liquidity, including $860.8 million of cash and self-warehouse and $2 billion of available borrowing capacity, which includes $1.5 billion under a line of credit secured by agency MSRs.
To not just break even but to continue their profitability during the current housing crisis, United introduced multiple new technology and loan products for consumers, including:
- Temporary rate buydowns, standalone and piggyback HELOCs and expanded jumbo ARM offerings
- TRAC (Title Review and Closing), a new process for title work and closing that increases speed-to-close and decreases borrower costs typically associated with the lender’s title policy
- UClose 3.0, a major enhancement to its client closing platform that offers hybrid and virtual closings, giving borrowers the ability to close anywhere and anytime on any device
- UWM Partner Academy, an online Learning Management System (LMS), available to UWM partners at no cost. This LMS offers a library of mortgage-related tutorial videos and quizzes. The platform assists clients in training new loan officers as well as sharpening the skills and knowledge of more experienced loan officers
Ishbia, when speaking about the company’s push for new initiatives this past quarter, said that “If you’re not going to invest in technology, help brokers grow, you’re not going to help train brokers, help them from a compliance perspective, help them build their business, help them market, help teach them, help them succeed, be their true partner, you’re not going to win in wholesale.”
United also reported an average application to clear to close rate of approximately 17 business days, about twice as fast as the industry, which officials estimated at 44 days. Another boasted strength is that the 0.71% 60+ days delinquency and 0.55% forbearance rates are below the industry averages of 1.7% and 0.69%, respectively.
Hubacker said that beyond new initiatives, to keep United’s profitability going, they “continue to be focused on staying disciplined with cost management in the current origination environment and are comfortable that more aggressive cost reduction actions are unnecessary and would be short sighted.”
Company officials shared that they anticipate Q4 2022 production to be in the $19 – $26 billion range, with a gain margin from 40 to 70 basis points.
Ishbia estimated that United’s share in the wholesale channel in Q3 “will be the largest ever recorded in history. I believe we’ll be north of 40%, perhaps even closer to 50%.”
“While it’s great to be No. 1 overall, we’re just getting started,” said Ishbia. “There’s a lot of upside ahead, and I’m so excited for the next three to five years and what we’re doing here together at UWM and with our broker partners.”
