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As other companies scale back, the nation’s largest mortgage lender hired 1,000 employees and remained profitable during the third quarter even as rising interest rates continued to suppress loan production. did.
Matt Ishbia, chairman and CEO of UWM Holdings, said the Pontiac, Michigan-based wholesaler is investing in new technology to ensure UWM is prepared for lower mortgage rates and an expanding economy. He said he is investing and hiring new team members.
During, UWM reported Wednesday’s third-quarter net income was $301 million, on revenue of $677 million, up 15 percent from the previous quarter and 31 percent from the second quarter.
Loans totaled $29.7 billion in the third quarter, down 7% from the previous quarter and 11% year over year.
UWM’s earnings were boosted by a $92.9 million increase in the fair value of its $281.4 billion mortgage service portfolio, while it also made larger gains on a smaller pool of loans it originates. Total sales margin reached 97 basis points in the third quarter, up from 88 basis points in the second quarter and 52 basis points in the year-ago period.
UWM stockhad traded as low as $3.23 and as high as $6.98 over the past year, but it soared more than 13% after the earnings release and Mr. Ishbia briefed investment analysts on Wednesday morning. He shared credit for the company’s success with the former mortgage broker. .
“The reality of what I’ve been saying for years is here: When rates rise, both UWM and brokers shine, while other brokers struggle,” Ishbia said on a conference call with investment analysts. he said. “Despite mortgage rates at 25-year highs and low housing inventory, we continue to grow in every aspect of our business, including our best buying quarter ever.”
Number of UWM mortgage originations per quarter
UWM originated $25.9 billion in purchase mortgage loans in July, August and September. This was the third-strongest quarter in the company’s history, surpassing rival Rocket Mortgage’s third-quarter loan total of $22.2 billion.
Since overtaking Rocket last year to become the nation’s largest mortgage provider, UWM has grown even closer to both companies. In the first nine months of this year, Rocket originated $61.5 billion in mortgages, a 46 percent decrease from $114.1 billion in mortgage originations in the same period last year.
So far this year, UWM has successfully originated $83.9 billion in mortgage loans, a more modest 18% decline compared to the first nine months of last year.
“It’s no secret why UWM and the broker community continue to do well in the buying market,” Ishbia said. “Purchasing transactions require experts. They require greater attention to detail. They require a higher level of service for everyone: real estate agents, consumers, and brokers. And they require contract deadlines. We need an efficient process where speed is key to protect our customers.”
Like other financial institutions, UWM’s refinance volumes have declined slightly. In the third quarter, the company refinanced $3.8 billion in mortgage loans. That’s about the same as the second quarter, but less than one-tenth of the refinance business UWM was doing in late 2020 and early 2021, when interest rates were at historic lows.
“We are prepared as interest rates change, as we are investing heavily now to ensure that our brokers reap greater returns than ever before in the next refi cycle,” Ishbia said. “The combination of the scale and quality of our purchasing business and our service book is so strong that our business can succeed in virtually any market. We accept that and come out stronger, which other lenders can’t do.”
In its latest annual report to investors, UWM said it employed approximately 6,000 team members as of Dec. 31, 2022. UWM did not disclose employee numbers in its second-quarter earnings report, but previously said the number of team members is down from a year ago. Ishbia previously said UWM has not furloughed any employees but may downsize through layoffs.
“Our culture is vibrant,” Ishbia said Wednesday. “We’re hiring. We’re growing and investing in technology. In the first seven years we’ve been in business, we’ve never laid off a team member. And in fact, we’ve never laid off a team member. We hired more than 1,000 team members in the third quarter and plan to hire even more in the fourth quarter.”
UWM’s third-quarter hiring will represent a 17% increase from its end-2022 staffing levels, but the company did not immediately respond to a request for current employee numbers.
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