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United Wholesale Mortgage Q1 profits up 89% despite lower production

Wholesale lender reported $453.2M in profits from January to March

The nation’s largest wholesale lender, United Wholesale Mortgage (UWM), in the first quarter of 2022 posted an increase in margins and profits over the prior quarter, increasing its purchase volumes to record levels.

But the Pontiac, Michigan-based lender’s total loan production fell during the same period, reflecting a shrinking mortgage market. 

The company on Tuesday reported $453.2 million in profits from January to March, up 89% from $239.8 million registered in the fourth quarter of 2021. Compared to the first quarter of 2021, however, profits fell 47.3%.

First quarter earnings were buoyed by a $172 million increase in the fair value of mortgage servicing rights (MSRs). UWM had $303.4 billion in the unpaid principal balance of MSRs as of March 31, 2022 compared to $221 billion exactly a year earlier.

“Our servicing book is strong. We make money there too. But we’re not dependent on fair value,” said Mat Ishbia, chairman and CEO of UWM, during a call with analysts. “The broker channel continues to grow: 35,000 unique loan officers submitted loans to UWM in 2021, and we think we will have more unique loan officers submitting to us in 2022.”

According to its earnings report, UWM originated $38.8 billion in mortgage loans in the first quarter of 2022, a 29.7% decrease compared to the previous quarter and a 20.8% decline year-over-year.


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Purchase loans grew from 24.9% of the total origination volume in Q1 2021 to 49% in Q1 2022 to $19.1 billion, the lender said. Gain-on-sale margins increased to 0.99%, compared to 0.80% in the fourth quarter of 2021 and 2.19% in the first quarter of 2021.

“We control our margins; we are not reactive to the market,” Ishbia said. “Purchase market is a lot less rate-sensitive, so we feel strong about our position right now.” 

Speaking for the company, Ishbia said: “We feel really good about putting pressure on some competitors.” That was evident during the company’s most recent initiative in early May, when UWM announced it will price-match loans up to 40 basis points with that of 20 different competitors. 

UWM forecasts loan production between $26 billion and $33 billion for the second quarter. Meanwhile, gain-on-sale margins are expected to be between 0.75% and 0.90%. 

During the conference call with Ishbia, analysts raised concerns about costs in a landscape defined by less origination volume. Unlike many competitors, UWM is not aggressively cutting costs by laying off employees.

Total expenses went from $316.9 million in Q1 2021 to $364.4 million in Q1 2022, with a significant increase in servicing, general and administrative and direct loan production costs. Salaries, commissions and benefits reached $160.6 million, which Ishbia considered a “solid” number. 

“It’s very important that we continue to manage our expenses. We have complete control of this, and we feel great about where we’re at,” Ishbia said. 

As of 12:10 p.m. EST Tuesday, UWM’s stock was trading at $3.59 a share, up 3.3% from the previous day.

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