United Mortgage Turns to Refinances to Fight Mortgage Market Challenges

United Wholesale Mortgage (UWM) continues to fight through the tides of the mortgage market. Despite some pitfalls in their Q4 2023 and full-year earnings, the company remains hard on their stance of success and is taking turns to adjust for the future.

“2023 was one of the best years in UWM’s history. It wasn’t the year that stood out from a financial perspective, but will stand out from a dominance perspective,” said UWM Chairman and CEO Mat Ishbia. “It was our second year as the number one overall lender. It was our third consecutive year as the number one purchase lender and our ninth consecutive year as the number one wholesale lender. As you heard me say many times before, the best mortgage companies shine in high rate markets, and that’s exactly what we have done consistently here at UWM.”

Despite losses seen in Q1, business turned the corner for the mortgage company in Q2 and continued through Q3. Q4, while a strong quarter for the company, saw some falls from the successes in pervious quarters. 

  • Total origination at $24.4 billion, down from $29.7 billion in Q3 and $25.1 billion in Q4 2022. 
  • Purchase origination at $20.7 billion, down from $25.9 billion in Q3 and $21.7 billion in 2022.
  • Net loss of $461 million compared to net income of $301 million in Q3 and net loss of $62.5 million in 2022.
  • Adjusted EBITDA of $99.6 million, down from $112.1 million in Q3, but up from $60.4 million in 2022.

For 2023 as a whole, UWM saw $108.3 billion in total originations, down from $127.3 billion in 2022. On the other hand, the company delivered their “best purchase year of all time,” reporting $93.9 billion in purchase originations in 2023. Other full-year results include a net loss of $69.8 million compared to $931.9 million of net income in 2022.

While purchase originations continue to be the company’s strong suit, looking forward, UWM executives see the refinance market starting to come on as mortgage rates will lower.

“When rates get to 5.75% – 6.25%, you’re going to see a lot of refi activity, because it’s been a couple of years now when people have been doing loans at 6.5%, 7% and 7.5%,” explained Ishbia. “Maybe that’s why our MSR book—we’ve been doing—we’re doing the most loans for everyone.”

To capitalize on this incoming trend, the company announced Refi 100, a “100-basis points pricing incentive on any note rate for conventional rate and term refinances,” this past January. The program extends through March 29, and is intended to “help independent mortgage brokers who work with UWM create their own refinance boom and grow their book of business.”

Overall, UWM expects Q1 2024 production to be in the $22 to $28 billion range.

“We believe 2024 will be a better overall year for the housing and mortgage industry. But regardless of the market, we will remain the best mortgage lender in America, and that recipe will not change,” concluded Ishbia.

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