United Wholesale Mortgage reports wider net loss in Q1, still outperforms Rocket Mortgage

Pontiac-based United Wholesale Mortgage reported a wider net loss in the first quarter than in the previous quarter, although it still edged out its Detroit rival Rocket Mortgage for total business.

UWM on Wednesday reported a $138.6 million net loss for the quarter, compared with a $62.5 million loss in the fourth quarter of 2022, which was the company's first quarterly loss since going public in early 2021. The first quarter of every year is typically a slow time in the housing and mortgage markets.

UWM CEO Mat Ishbia told investors during a Wednesday morning earnings call that the company's core business was profitable in the first quarter from an operations perspective.

He said the overall $139 million loss reflected a decline in the value of UWM's mortgage servicing rights, which was a result of interest rates edging down from the fourth quarter to the first quarter.

"If you look at core earnings, we actually made more money in the first quarter of this year than last year’s first quarter," Ishbia said. "And on top of that, we had less volume and lower margins. But I still made more money.”

UWM has now been the nation's top mortgage lender by volume of loan originations for three consecutive quarters. The No. 1 title previously belonged to Dan Gilbert's Rocket Mortgage.

UWM had $22.3 billion in total originations in the first quarter of 2023. Rocket Companies, the parent company of Rocket Mortgage, last week reported $17 billion in originations for the first quarter.

More: Rocket Companies and United Wholesale Mortgage shed thousands of jobs

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UWM's per-loan profit margins grew in the first quarter to 0.92% compared with 0.51% in the fourth quarter. Declining profit margins across the mortgage industry had been putting additional pressure on lenders at a time of declining business due to higher mortgage rates.

“Making money profitably right now is a big deal, and UWM is doing it and we’re going to continue doing it going forward," Ishbia said.

Ishbia, 43, earlier this year purchased the Phoenix Suns, an NBA team, and has recently been the focus of heavy media attention since a Denver Nuggets player shoved him during a playoff-series game on Sunday after Ishbia, who was sitting courtside, caught an out-of-bounds ball.

No one brought up the incident during Wednesday's earnings call.

Another UWM competitor, Ann Arbor-based Home Point Capital, recently announced that it was selling most of its business following a series of money-losing quarters to Tucson, Arizona-based The Loan Store. Some Home Point employees moved over to The Loan Store while others were laid off.

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

This article originally appeared on Detroit Free Press: Pontiac-based mortgage lender UWM reports wider loss in first quarter