While many in the mortgage industry suffered larger setbacks in the tumultuous market of 2022, United Wholesale Mortgage (UWM) had a much different outlook on the year. The company maintained its spot as the No. 1 overall mortgage lender in the U.S. for the second quarter, continued to be the largest wholesale mortgage lender for the eighth year in a row and held 8% of the share of the overall mortgage market.
“2022 was a historic year for UWM. Becoming the No. 1 overall mortgage lender in America, while originating mortgage loans exclusively through the wholesale channel, is a validation of our unrelenting commitment to the broker channel,” said Mat Ishbia, chairman and CEO of UWM. “I’m confident UWM is the best mortgage company in America because of our efficiencies and partnership with mortgage brokers. The broker channel is the best place for consumers to get a loan, and the best place for loan officers to work, and we’re seeing that happen in front of all of our eyes.”
UWM saw a net income of $931.9 million for 2022, and a net loss of only $62.5 million in Q4. Total loan originations were at $127.3 billion, well down from the $226.5 billion in 2021. Purchase originations, however, were up at a record $90.8 billion compared to $87.3 billion in 2021. The company saw a total gain margin of 77 bps, a drop compared to 114 bps in 2021.
“Our servicing portfolio remains very strong, with a total UPB of approximately $312 billion as of the end of 2022, as newly originated and retained MSRs largely kept pace with sales and payoffs throughout the year,” said UWM Chief Financial Officer Andrew Hubacker. “With very low delinquencies and high asset quality, our MSR portfolio remains strong and continues to provide balance to our business model, a recurring quarterly cash flow stream and a strategic source of additional liquidity if and when we choose to sell our MSRs in the bulk secondary market.”
For Q4 specifically, total equity was at $3.2 billion compared to $3.4 billion in Q3. Total loan origination in Q4 was at $25.1 billion, down from $33.5 billion in Q3, but at a total gain margin of 0.51% (Q3 was 0.52%). This included purchase originations, which registered at $21.7 billion compared to $27.7 billion in Q3. The company also saw a total gain margin of 51 bps, which is only a slight drop from the 52 bps in Q3.
UWM ended Q4 with about $2.1 billion of available liquidity, including $886.2 million of cash and self-warehouse, $1.25 billion of available borrowing capacity and $500 million under an unsecured line of credit. Additionally, the company achieved an 11% share of the overall mortgage market, and a 54% share of the wholesale channel.
“UWM had 54% broker marketshare in the fourth quarter, the highest share reading ever, up from 41% in the third quarter. There’s a 100% result of our commitment to the broker channel. Our partners continue to improve and win regardless of the market,” said Ishbia. “Helping our partners grow faster than the rest of the market has been a huge part of this success. We’ll remain dedicated and committed to helping the mortgage brokers across America dominate, provide the best service, rates and technology to their consumers so they can grow in their individual markets as they continue to win as well.”
Some operational highlights that company executives noted were that UWM achieved the highest ever Net Promoter Score of +90 in Q4, up from +87.1 in Q4 2021, and that their 0.85% 60-plus days delinquency and their 0.65% forbearance rates are significantly better than the industry averages of 2% and 0.70%, respectively.
As for what to expect in Q1 2023, company executives anticipate first-quarter production to be in the $16 to $23 billion range, with a gain margin from 75 to 100 basis points.
“I’m excited about 2023, a year in which we can expect our competitive advantage to continue to become clearer to everybody as we continue to invest in our people, the brokers and our business. We know this formula works because we’ve seen it in similar market cycles, and every time we’ve emerged stronger and more dominant. Right now, it is not any different,” concluded Ishbia. “2023 is another huge opportunity for UWM and the broker community to continue to separate ourselves further from our competition, invest in the future and continue to win together as a team.”