UWM clears $1.33B in profits in Q4 2020

UWM clears .33B in profits in Q4 2020
United Wholesale Mortgage originated more than $54 billion in mortgages and generated more than $1.3 billion in net income during the fourth quarter, the company revealed on Wednesday.

The wholesale lender’s parent company reported $54.7 billion in originations, a 71% increase from the $31.9 billion the Michigan-based lender originated in the fourth quarter in 2019. At the close of 2020, UWM originated more than $182 billion in mortgages, blowing away the $107.8 billion in mortgages it delivered in 2019.

UWM bested its third quarter results in some ways, during which it originated $54.2 billion. Net income shrank slightly from the $1.45 billion in the third quarter.

The company, which went public earlier this month via a special purpose acquisition company, made $3.38 billion in net income during 2020, and $1.37 billion in the final quarter of the year.

All told, UWM only lags behind overall market leader Rocket Mortgage, which will reveal its earnings later this month.

“The fourth quarter and 2020 overall was phenomenal for UWM and the wholesale channel by any measure,” Mat Ishbia, the wholesaler’s president and CEO said in a statement.

“We are very proud of what we accomplished in 2020 but have shifted our focus to 2021 and beyond. 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.”

UWM, which only uses brokers to deliver mortgages to borrowers, managed to post a gain-on-sale margin of 305 basis points during the fourth quarter, significantly better than the 110 bps it delivered in the fourth quarter of 2019.

Under Ishbia, the wholesale lender has embarked on a strategy of holding its mortgage servicing rights. At the end of the fourth quarter of 2020, it had $188.3 billion in MSR. A year ago, it had just $72.6 billion in MSR.

UWM will hold its earnings call with investors and media on Thursday morning.
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