August 5, 2021

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Mortgage News

United Wholesale Mortgage sees best first quarter ever

UWM Holdings Corporation (UWMC), the indirect parent company of United Wholesale Mortgage, has released its financial results detailing the company’s strong growth for the first quarter ended March 31, 2021.

The company posted net income of $ 860 million in the first quarter of 2021, up from $ 20.3 million in the first quarter of 2020. Total income margin also skyrocketed from 95 basis points to 219 basis points for the quarter. Total equity for the quarter increased from $ 681.5 million to $ 2.78 billion.

“Not only was the first quarter of 2021 the best first quarter in our 35-year history, it marked our first quarter as a public company and solidified our foundation for growth,” said Mat Ishbia, chairman and CEO of UWMC. “We believe we now have the capital, liquidity, technology, campus and staff to grow our business and become the largest mortgage lender in the country.”

Continue reading: United Wholesale Mortgage CEO sees new refi opportunities for borrowers and brokers

According to the company’s press release, it continues to invest in advanced technologies like machine learning and robotic process automation (RPA) to improve operations, reduce costs, reduce downtime and speed up loan processing.

As a result of these technology investments, the lender saw its total lending volume grow 16% from $ 42.4 billion to $ 49.1 billion year over year. In the first three months of 2021, the unpaid balance of mortgage service rights rose from $ 85.6 billion to $ 221 billion.

Ishbia added that they are confident that UWMC can survive the move to a shopping market and pressure on margins as its business model is “designed to outperform the competition in these conditions.”

One of its competitors on the wholesale channel, Home Point, reported last week that intense competition has done so took a bite out of his Q1 winnings. The company’s net income declined $ 35.5 million to $ 159 million, while profit margins decreased 72 basis points to 128 basis points compared to the previous quarter.

UWMC forecast second quarter production in the range of $ 51 billion to $ 55 billion with an expected profit margin of between 75 and 110 basis points.

“While others in our industry are lowering volumes in Q2 21, UWMC is just the opposite,” said Ishbia. “Given our buying focus and broker network, we expect to do more business in Q2 21 than Q1 21 and believe that we will be one of the few mortgage lenders in America to grow in an environment of rising interest rates.”