United Wholesale Mortgage reports loss, but keeps No. 1 title

JC Reindl, Detroit Free Press
·3 min read

Pontiac-based United Wholesale Mortgage saw a $62.5 million net loss in the fourth quarter, although it extended its streak as the nation's top mortgage lender for the second consecutive quarter.

"We are the strongest mortgage company in America — period," CEO Mat Ishbia said in a Wednesday morning earnings call.

UWM reported just over $25 billion in total mortgage originations for the quarter, which was more than Detroit-based Rocket Companies' $19 billion. Its share of the overall U.S. mortgage lending market is now 11%.

However, Rocket, which reported its year-end results Tuesday, still edged out UWM in mortgage originations for all of 2022.

  • Rocket had $133.1 billion in mortgages for 2022.

  • UWM had $127.3 billion in mortgages for 2022.

What it means

The $62.5 net loss for the quarter was UWM's first quarterly loss since going public in January 2021 through a blank-check company or SPAC. Rocket, for its part, also had its first loss as a publicly traded company during the quarter.

More:Gilbert's Rocket Companies reports first quarterly loss since going public

More:Mat Ishbia on overtaking loan giant Rocket: 'I was confident this day would come'

Why losses are happening

All banks and mortgage lenders experienced steep declines in business during 2022 amid rising mortgage rates and slower home sales. The declines followed boom years in 2020 and 2021, driven by surges in mortgage refinance activity.

  • Refinancings were 28% of UWM's business in 2022.

  • Refinancings were 61% of UWM's business in 2021.

Rocket Mortgage was especially impacted by the end of the 2020-21 refinancing boom. However, Rocket doesn't break out the portion of its business each quarter that was refinancings versus home purchase loans.

Other key data

UWM also reported:

  • Net income, or profit, of about $932 million, for all of 2022.

  • Net income was $1.6 billion for all of 2021.

Phoenix Suns owner Mat Ishbia speaks to the media at an introductory news conference at Footprint Center in Phoenix, Feb. 8, 2023.
Phoenix Suns owner Mat Ishbia speaks to the media at an introductory news conference at Footprint Center in Phoenix, Feb. 8, 2023.

What UWM is known for

UWM's entire business model is "wholesale" lending, which is underwriting loans for independent mortgage brokers. By comparison, Rocket does a mix of wholesale and direct-to-consumer lending.

UWM surpassed Rocket as the nation's No. 1. mortgage lender by volume for the first time in the third quarter of last year.

The NBA’s board of governors last month approved Ishbia's purchase of a controlling ownership stake new in the Phoenix Suns and WNBA’s Phoenix Mercury.

Rocket Mortgage founder Dan Gilbert, who owns the Cleveland Cavaliers, reportedly abstained from the 29-0 vote.

A Wall Street analyst Wednesday asked Ishbia whether the purchase of the teams will affect his "equity commitment" to UWM.

Ishbia initially responded that the purchase will have "zero impact" on his mortgage company, although he quickly added that it could in fact bring some positives.

"I have a bigger platform, personally, more people following me. More people listening to me. More people learning and being educated about (mortgage) brokers," he said. "It’s only going to help — it’s not taking any more of my time.”

Contact JC Reindl: 313-222-6631 or jcreindl@freepress.com. Follow him on Twitter @jcreindl. 

This article originally appeared on Detroit Free Press: United Wholesale Mortgage reports loss, but keeps No. 1 title