Lunch & Learn: Are appraisals the next big opportunity in mortgage fulfillment?

This Lunch & Learn for mortgage lenders will explore the evolution of the appraisal process as well as opportunities for innovation.

Why brokerages and mortgage lenders are rushing into JVs

Joint ventures are suddenly stitched into the fabric of a handful of national brokerages. But the idea of the joint venture collides with the loose, informal networks that color the American housing economy.

How to simplify the appraisal process for everyone in today’s hot market

While the world might be slowly getting back to normal, the housing boom is far from over. Appraisers need to make sure they have the right tools to manage the high demand.

Robert Dietz on why the single-family rental market is growing

In this episode of HousingWire Daily, NAHB's Robert Dietz explains why the marketshare of single-family rentals is growing despite strong homebuyer demand. He also discusses the NAHB’s latest Housing Market index.

IPO / M&AMortgage

United Wholesale Mortgage plans $16B public debut via acquisition

Mortgage lender's proposed merger with Gores Holdings IV is the largest SPAC deal ever announced

United Wholesale Mortgage, the largest wholesale lending firm in the country, is joining the blank-check company craze and will make its public debut via an acquisition.

The Detroit-headquartered UWM will merge with businessman Alec Gores’ special purpose acquisition company (SPAC) Gores Holdings IV Inc in a deal that will value the new UWM at $16.1 billion, the company said in a statement Wednesday morning. That’s roughly 9.5X the company’s estimated 2021 adjusted net income of $1.7 billion.

The acquisition will enable UWM to retain roughly 94% of the combined company. As part of the deal, UWM will receive about $425 million in cash held in Gores’s trust account, plus $500 million from a private placement. The combined company will be listed on the Nasdaq under the ticket symbol “UWMC.” The Wall Street Journal first reported the news.

UWM’s CEO Mat Ishbia, who took over the family business from his father in 2003 and transformed it into the largest wholesale lender in the nation, will be head of the combined company.

“Becoming a public company will enable us to advance our strategy and capitalize on new opportunities to expand our already established leadership in the mortgage industry under our unique family culture, which has been the cornerstone of our Company’s success for the last 34 years,” Ishbia said in a statement, adding that employees would receive equity. “We believe that being a public company will also allow us to help our mortgage broker clients continue to build and grow their businesses, generating value for all of our stakeholders.”

The acquisition via SPAC is expected to close in the fourth quarter.

UWM’s move into the public markets follows that of rival Rocket Companies, the country’s largest mortgage lender by volume. Rocket, which does most of its business through direct-to-consumer channels and not wholesale, debuted on the New York Stock Exchange on Aug. 6 at a disappointing $18 a share, but has since rebounded and is trading at about $22 a share.

Both companies are reaping the rewards of near-zero interest rates and minuscule housing inventory.

Rocket said it originated $72 billion in loans during the second quarter, and turned a $3.5 billion profit. A few weeks ago, Rocket executives forecasted between $82 billion and $85 billion in loan originations in the third quarter, with gain-on-sale margins between 4.05% and 4.3%.

Ishbia last week told HousingWire that his wholesale firm was lending in record volumes, thanks in part to a suite of low-rate purchase and refinance products. The company is on track to underwrite nearly $200 billion in mortgages this year, up from about $108 billion in 2019.

Its partnership with Gores will likely put Ishbia in the pantheon of the 1%, potentially making him a billionaire overnight. According to the Journal, founders who put millions or tens of millions of dollars into a SPAC-merged company are typically awarded shares equivalent to about 25% of what’s raised in the IPO.

Alec Gores, a billionaire who made his money through leveraged buyouts, is among the more active players in the so-called SPAC market, which has attracted the likes of Bill Ackman, Paul Ryan, Gary Cohn, Billy Beane and Chamath Palihapitiya. Gores’s fund bought Hostess Brands in 2015 through a SPAC and has purchased three other companies using the so-called blank-check companies.

Another large mortgage lender, loanDepot, the nation’s sixth-biggest mortgage lender by volume in 2019, is reportedly seeking an IPO that would value the company at upwards of $15 billion.

Leave a comment

Most Popular Articles

Why brokerages and mortgage lenders are rushing into JVs

Joint ventures are suddenly stitched into the fabric of a handful of national brokerages. But the idea of the joint venture collides with the loose, informal networks that color the American housing economy. HW+ Premium Content

Oct 25, 2021 By and

Latest Articles

Mortgage rates continue to move north

The average 30-year-fixed mortgage rate continues to trend upwards, rising by five basis points to 3.14% for the week ending Oct. 28, according to Freddie Mac’s latest PMMS survey.

Oct 28, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please