United Wholesale Mortgage posts $3.38B profit, record loan volume in 2020

Breana Noble
The Detroit News

United Wholesale Mortgage Holdings Corp. on Wednesday recorded a profit of $3.38 billion in 2020, more than seven times its net income last year as low interest rates spurred refinancing activity.

The Pontiac-based mortgage lender shared its financial results for the first time since going public last month on the New York Stock Exchange in a $16.1 billion merger with a blank-check company. It closed 69% more in origination volume, a key market indicator, than in 2019, totaling a record $182.5 billion.

United Wholesale Mortgage Holdings Corp. CEO Mat Ishbia (middle) rings the bell at the New York Stock Exchange alongside (from left to right) Alex Elezaj, chief strategy officer; Melinda Wilner, chief operating officer; Jeff Ishbia, founder and board member; and John Tuttle, the stock exchange's vice chairman and chief commercial officer.

That volume places UWM, the country's largest wholesale mortgage lender originating loans exclusively through mortgage brokers, at No. 4 in overall originations nationally behind Detroit-based Rocket Companies Inc., Wells Fargo & Co., and California-based PennyMac Financial Services Inc., according to industry news website Inside Mortgage Finance.

UWM's shares were trading up more than 2% in after-hours trading after closing Wednesday up more than 10%. The company predicted it would close loan volume between $52 billion and $57 billion in the first quarter of 2020, an increase of up to 34.4%.

Refinances represented 76% of UWM's 2020 mix at almost $140 billion, a 141% increase year-over-year. The remaining nearly $43 billion in volume came from purchases, which actually decreased almost 14% year-over-year, despite existing-home sales in 2020 reaching their highest level since 2006, according to the National Association of Realtors.

UWM closed out the final three months of the year with $1.37 billion in net income, eight times that from the fourth-quarter of 2019 with a gain-on-sale margin increase to 3.05% from 1.1%. Origination volume totaled $54.7 billion, a 71% increase.

The company ended the year with $1.22 billion in cash and cash equivalents, eight times more than what it had going into 2020.

Now public, UWM will use access to public capital to invest in technology to make the mortgage process more efficient, UWM CEO Mat Ishbia has said. Last year, the company launched its InTouch mobile app that allows brokers to navigate from underwriting until the loan is cleared to close. It also enhanced its online mortgage application called Blink+ to serve as a point of sale, loan origination system and customer relationship manager for its brokers.

The nonbank lender also completed work connecting its 2018-built headquarters to a south campus and acquired a nearby building for additional office space. The company now has more than 8,000 employees, up from 4,907 at the end of 2019.

“We are very proud of what we accomplished in 2020 but have shifted our focus to 2021 and beyond," Ishbia said in a news release. "By going public and accessing the debt markets, we now have the capital and liquidity to not only invest in technology and service as we have always done, but also the ability to take advantage of higher profit opportunities when available or otherwise returning excess cash to our stockholders."

Ishbia will hold a call with investors at 10 a.m. Thursday. Crosstown rival Rocket, the country's largest originator, is scheduled to report annual financial results on Feb. 25. It closed $323 billion in mortgage volume last year, according to Inside Mortgage Finance.


Twitter: @BreanaCNoble