UWMC - Earnings call 3 2023 | UWM Holdings Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Rob, and I will be your conference operator today. At this time, I'd like to welcome everyone to the UWM Holdings Corporation Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Blake Kolo, you may begin your conference.

Blake Kolo

Good morning. Chief and Kolo, Relations. of Blake is Business Head Officer Investor This you welcome Corporation's UWM and joining Earnings the Thank us, XXXX to for Third Quarter Call. Holdings

conference to we everyone Before would forward-looking like I that start, this call includes statements. remind

may this factors materially statements, morning. to For refer results release earnings forward-looking actual that information to cause more that please the about differ from we issued

the and and now turn call Mortgage. CEO United UWM will Mat Chairman over I Ishbia, Corporation of Holdings Wholesale to

Mathew Ishbia

loan thank to of that and the of when everyone months. and and XX, the it, every opportunity We XX had means back quarter, loans more we're I next much for rates joining for Appreciate a doing right great X, call. I'm Blake. do Thanks, know you opportunity And us now. ahead. excited lot our we down for today that another go proud in the incredibly results

great. going are things So

reality rates housing purchase a aspects of saying in business, You're continue Despite the been about rates now XX-year I've UWM the in thrive best to one while we struggle. including of shine, quarters lower and both our of of brokers time. mortgage all rise, having seeing others what When inventory, high years. all for and

getting why they service level well brokerage, speed require and require and more higher to deadlines. estate It's in no attention And transactions for a secret continue an real process so community of They expert. an UWM They agents, where the the everybody. Purchase to do broker matters require purchase market. for detail. efficient consumers contract require

mortgage independent brokers these match Together, needs UWM perfectly. and

a NPS quarter. for world-class this XX scores, plus We which was actually have

the are We the that fastest times have industry. fantastic in turn

to with stable UWM is and as And client others and all and tools technology it's We at efficiency cyclical, earnings We at handled details transaction providing to our with a less provide you volume hard the service. love for amazing business speed compete because level. continue and ensure purchase are to see. consistent brokers and

of will now brokers ready the we than our we when The right ever be because scale ensure investing our turn, and cycle. refi servicing can business business and is thrive that quality time heavily virtually of are And combination next come refis purchase embrace and each strong markets. will no so happen. win We other say cycles in book bigger can our And to these our lender out all in they stronger, that. we

and both, lender be or we'd of so last said for quarters X-plus best year for of in always course, last the years X total but X but numbers all rather the this I've and fact, consecutive years wholesale. the biggest, last in than the year been the or we've, really

our $XX production, within Turning for in We delivered guidance. the to billion our results overall volume. $XX.X purchase Of well that, was almost billion quarter.

As did market. few more were doing purchase I volume period. lender dominate other volume, past we talked earlier, the than We any in quarters the in purchase

is I inclusive our $XXX And can which $XX.X which markup profitable, the But MSR of margin out the almost of XX in direction gain point basis no we end company always portfolio. you know, of at are MSR as Our of range. net points like our country mark, we higher million of generated million of operationally regardless mortgage the to say. income, was

even year fact, money we right competitors have more quarters' business that true And actually, in made this barometer of X how think all our or the or I quarter made worth. is are our our than many is That's X of refi-focused This success. now. strong

X of years people winning. look realize mortgage also have great low-rate out who ever hope are continue that than are significantly. in I more clear environments companies or in happen. the seen struggling went now is it And we that hope to last will that I we multiple business

how are But our interest best-in-class rate. is regardless great UWM we mortgage we remember, continue all And America, of companies that see that in obvious excellent and thank originator that We rates other are in investors have drop. of once that. the the noticed doing choice to hear is why and

it's opportunity. mortgage it's will take turns. mini of refi The big massive. earlier get boom, opportunity the refi ahead a market scale most most boom, the but be will months, XX or I end UWM to be might there, the XX that company. It months X Whether when months prepared the a we make believe will on

details. CFO, to Andrew, to our more now it going few for a turn I'm over

Andrew Hubacker

continued strong originations, and our continued range performance Thanks, QX margin backdrop strong in of is of This and comparisons. a Mat. operational the particularly end year-over-year and prudent favorable consistently high end quarter, of a the market towards Against delivered rates, results sequential of financial management. cost of gain volume result the increases high interest in we the on our guidance purchase on emphasis

income net $XXX.X sequentially million, as generated fair we've QX in to considering MSRs operational our compared in Year-to-date, XXXX year-to-date. income and and core of increased before the changes and of value

We out to are by technology make solutions. preparing additional and members rate channel focused product in interest on team the for growth the new hiring wholesale and cycle rolling investments as in next we continue and

excluding are servicing, operational down Nevertheless, other interest expenses, expenses, and approximately X% nonoperational year-to-date. our core

consistent available capital, leverage, strong liquidity the with including quarters. remains our very and sheet, X balance past Our and

under of generated To date, sales we $X.X MSRs. have in from proceeds billion net just

capital market warrant operational We MSRs have sell our opportunistically to conditions fund as to liquidity needs. continued

sales, these and pace maintained of high-quality have originations sizable largely as sales kept a we have payoffs. Despite servicing and portfolio with MSRs

just consisted the of significant flows. of continues which portfolio recurring quarterly cash $XXX end of quarter, the total of to UPB billion a as deliver MSR over loans Our with

end cash, end $X.X to billion is the from lines access consistent quarters our including largely under last a significant X the liquidity, borrowing approximated unsecured capacity year. which of and Liquidity of warehouse the and and [indiscernible] of quarter, the of and as increase past credit accessible secured

any current well We positions continue market that our believe to financial cycle. for us strength

back turn will Chairman our Ishbia, things CEO, now over closing to for Mat remarks. and I Okay.

Mathew Ishbia

sound Q&A. here it. businesses a but come But Thanks, industry. Andrew. the broken like sometimes. so record see how know in I'll mortgage our most and may to see to headquarters. we to marketing guys you can work I Appreciate be out for here, the [indiscernible] get brief challenge I love I the things at

culture Our vibrant. is

are hiring. We

growing. We're quarter. the member. we team third are to over XX We we've members. the in the years team hired off in a going we've technology. never in quarter, X,XXX fourth again investing in laid fact, In in We're business, And more hire been

[indiscernible] Brokers are not By host training down. for development. starting on market the growing are we'll And that. year-end, are and campus broker show We channel. our think slowing to the XX,XXX I over loan numbers

UWM will is to be. continue strong very and

overall purchase in origination world-class market with service by growing both numbers, We share technology that and huge needs. are dominating clients' exceeds the our

will quarter committed our And XXth shareholders. And a this we as be consecutive our ever to $X.XX announced that dividend. quarterly we remain

We them. in consistent are believe who rewarding to us, our we those and appreciate continue in and shareholders

close range basis billion plan fourth we the to to the margins and be to points. between for XX and strong. year And our XXX $XX billion out of We quarter, $XX production expect

to the operator now I'm Q&A. going over for turn to it a

Operator

from comes the Your first Instructions] from question line Kyle [Operator Jefferies. Joseph of

Kyle Joseph

looks quarter. did there? but trends very sorry, margins to your fourth like thoughts. what a of to -- Obviously, normalized the sort anything you'd just quarter. want volumes in or kind get call in strong you guidance highlight rates of were Any onetime obviously, It's, out good I expect items the despite Or thing there?

Mathew Ishbia

that are there's nothing thanks was we great And daily -- the no onetime We there's competitive. margins is XX quarter. that's wholesale same No, basis. what a question. toughest guide your will the it's the obviously, seems margins in have Yes. specific in markets. like XXX the brokers besides And end on going continue obviously, well. -- higher as to about, it for margin I set And quarter. It be for items, to nothing this No, a talk we, the the range, of on

Kyle Joseph

MSR of XX the selling think as And this of in number you opportunistically we there. know portfolio, the going are is X portfolio, guys on to the it. be ballpark expect Got kind that size forward? But I should you about then

Mathew Ishbia

on basis. Opportunistic. a We the decision make monthly

business. We we for yes, also the it. good about [indiscernible] discuss what's But feel best

think been it, $XXX now. call that, basically billion I range in for years I we've

a Does it point? to X will And at now, at XX you've Does of and between XX some steady more as be what X XX it's some it pretty feel going up X X like number. it right to go the seems so go at that down one But seen. XX we Probably same point? point. to

Kyle Joseph

one And me, then one last Got Mat. for it.

thinking about risk want the Just the how weeks, realtor sort on and your implications just for of brain in you're UWMC see opportunities noise the we've ruling specifically? or NAR the industry few last space and and of all to pick the kind for any seen

Mathew Ishbia

a also to a Well, obviously, does lot there's before if anything lot but change. there's about of of work be ever talk ever something changes actually done it,

close stay to business. in of weeds of the understand implications. it. We're the We we the all So

the are is this happen, I industry, But that or change in people and most suggesting you would should with will always And the change not tell what change, tune any with win. any in happen by I'm way. the

a bit lenders changes whether a of guideline When those UWM changes, years. in the in country that's usually whether the win the like has that best bit in in past, little has [indiscernible] other UWM changes for won things. we it's it's there's done when uncertainty, fluctuation, little win. of

or will suggesting I'm happen. this change so will happen change And any not

confident it help take win, But the positive if something does happen, I'm a to win and in win our advantage same our time. ability help that way, help brokers realtors consumers of at really

Operator

KBW. next comes Bose question from the of line from Your George

Bose George

to the of will And like are Actually competitive banks a well. total go percentage less to think I that there? to grow volume? continue as ask that continues wanted And sort mean, it I a growth. looks pretty jumbo of do you little the being about

Mathew Ishbia

I from -- don't more the banks being for jumbo it see it goes No, Yes. I change what down. goes Yes. don't big and competitive really see. Thanks you loans? mean, other up on think are I than a question.

the So as they they driver on little be market will may bit but little that's focus a our a there or things, or or opportunity? success back of bit out volume. or other not struggle of a Yes,

a -- a at best. it's really [indiscernible] It's rounding

that great to good broker will all and whatever to consumers. So to and And on take option jumbos it whether those continue loans, grow win. opportunity. it's trying whether continue loans $XX,XXX consumers Brokers best it's of may succeed, loans. are do care jumbo, the are for be, Brokers

Bose George

And Okay. the Great. to then going back the and margin guidance. gain on sale actually just

the the any just Or of thoughts on margins at the the seasonality we in midpoint at the Just there? sort of not or range? of sort high XQ, see could end

Mathew Ishbia

somewhere be mean, the because I is in to I or Yes. expect I for always plus it. gave the it's reason a I that minus, range how think a middle of about usually going range,

You there's are A doing and out quarter you're understand rebuys, pointing the in people correct, lot cyclicality no though, of fourth cyclicality. quarter. in first don't if all

But purchases, in look quarter saw at our are business quarters. it real earlier even fourth and -- you as first you year. quarter business, And first this mortgage slower

expect in And I fourth it first so why a to guided little to That's the slower be quarter. [indiscernible]. we and

things, all do expect for always we'll of I aspects to And I so. us continue think, done, which consecutive in say, XX I've to meet quarters. guidance I

the purchase, So fourth quarter country. you're slow especially and second doing then are of point purchaser quarters. astute obviously quarter that a lot months -- mortgage are quarter, but first or we're when you out in third the yes, and And largest to and

Operator

from Your the next from Hagen of BTIG. comes Eric line question

Eric Hagen

margins. more on one Maybe the

ballpark in Just at the these whether you've maybe rate broker in levels competitiveness to why might more have levels these rate even by at the if been really stability now? just margins rates in kind like this of sense surprised the stable and margins for get want stay the channel a and market right

Mathew Ishbia

Yes.

for said I years, daily. I've the set margins like So

-- it's way. we the margins those, we the control in So positive be. what going always margins make decision and a to will We are the control

try -- help brokers -- to and set and doesn't that But be the of the so out it's -- great we're it. very pricing And It's involved brokers market the not it's we dictate for not competitive. details so So the we market-driven. as UWM-driven, with much.

our don't the look day, margins like our I or markets guys capital I but I that, people where at do team. with every just you -- Personally, And the we reality that it. to that believe that's understand pricing. going set I is to it know are know be.

when market think I'm point, that's Instead XXX, to when I range changes that's very the saying XX XXX that as and be will to what hey, will confident the XXX. XXX and quarter. to to XXX will might to your XX UWM And so And as this what in follow. then XXX, But margins I'll the say, market this XX what or evolves, changes, why And change. asking, and you're to the -- it or when of tied to eventually, completely again it's does, market that's that XX I say, changes changes. range, others

Eric Hagen

I that. appreciate Right.

going right MSR to for think to buyers how of what buy how So are to and and about expectations forward? develops market banks thinking conditions in now? sensitive and bulk guys that market of lot and how be of large capacity more buyers capacity their in you the you those MSR see might you the A sellers the really be

Mathew Ishbia

Yes.

do to team we bids this bit a in and a we've a is others realizing found it made And higher has very are maybe our a Blake of little business job we research, is his and and what our little have the -- seen great active who so market. do So market. than Kolo are what actually

So really we've seen great market. a

for that current less think low less We originations it, as and opportunity are it's and be get bring and really of the out. the that consistent the tough year people product. and get looking product. partner people time have for there, there's something bids this less We again. less looking rate I [indiscernible] we There's with And like we out out But up people with people multiple starts, to lot them. there's are bidding new are people usually people a on because that product any there,

a And so selling issue. actually market and MSR big there I supply out really think there's and It's demand MSR well, [indiscernible] a for for obviously. as

think lot there. I out of and a have the of there's supply, lot demand we a

Operator

from next Morgan from the James question of Faucette comes Your line Stanley.

Unknown Analyst

is for Jeff actually James. on This

up this that your even the direct were quarter noticed costs were Just loan though originations down bit. XX% little production a

a there's costs driver highlight to there as this if anything wondering Just quarter. of those

Mathew Ishbia

Yes.

actually, Andrew, you down. Is that So X% to? correct, want

Andrew Hubacker

X% Yes. for why a down increase program. the initiative Part that of is programs, there. affordable That's of the our is most

Mathew Ishbia

are to So because it's not and asking what is you're we're of. something Freddie very affordability, FHFA, Fannie expense help which to tied supportive doing

but And so it that's it's bucket, not what in that is.

Our product on are basis. a loan-by-loan expenses a basis up a cost not or on XX% variable

Unknown Analyst

Understood.

Freddie. about increasing industry -- just repurchase rate a loan been for headlines request there's Okay. few And of recently the then from Fannie,

wondering guys impact seeing related Just necessarily I you're not there, are were of anything expecting loans up, if what eligible issue, going the kind industry to know for you something And forward. your different. Ginnie that but repurchase

just talk So just maybe about that.

Mathew Ishbia

Yes.

I in been on going credit she industry Thompson it our Director realized give and it's Sandra great in and after is a job, hot to And a does FHFA think attention. she the this the brought what's topic to knows market. to

what the are And I think aligned with expects. and what FHFA Freddie Fannie to and more industry making be changes expects

same old more real it's of just not thing. been issue. a so It's been And

of And beyond we've even making, in changes think months. the what I be the reduced I last think we're XX even actually, it with will seen some

be think it and the Mac positive I of some doing a details. change forward. So of some a won't a little Mae big got I it get Freddie stuff to I bit out going tied normal real overall, big you But think because a are to be deal, that of somebody course. think Because of and interpretations to will COVID, Fannie want it's deal not the the

Operator

question of [Operator Barker Instructions] Piper Kevin Your the from next comes from line Sandler.

Kevin Barker

to XX more you to some XX. push I and affordability move comments some on move? on a just from you moved color credit credit the Is follow-up in Can the made. that trying noticed loans? X score box more partly expand you to of X affordable that give down make And due Great. just to the that maybe

Mathew Ishbia

not UWM. that's business want to want the move come are is real was tied on that The to request them UWM. Yes, get want they They tied to loans to XXX% us. to they really I to brokers use biggest send to. is issue is doing of The what

some we in agents real brokers and roll they use to non-QM if the use products out Freddie. why when ] easier. estate know faster want look different because they'll UWM they referrals get and That's [ back. why we out they process We roll our we and from things UWM, so Fannie -- at the And consumers because that's because the make

program brokers And -- X to so with already that's helping course, years where lot product down our a they're not LIP do and help is that X% lot we a VLP a really last tied that we're loans to with expansions doing just towards been program a over and of have affordability of and the that FHFA, of Freddie to X affordability, on their is Fannie hit which lot money goals stuff of programs. putting

a brokers doing, at we next But brokers. our to they're the these for And going X same years. focused be refinancing we wallet of share clients amazing that we're And know experience. the because client lot make because matters experience sure time, brokers have they or the an of in that sure year here dominate the we'll making loans the are that increase and want we to on continue take to care

quite the That's If Thus, isn't don't lenders, why same. experience the back. they get other UWM. to they use honestly, people the use want loan

Kevin Barker

going Okay. your Sorry sell to do missed quarter? of Great. And the how back some MSR the third portfolio the of servicing much you in servicing I commentary. sales, then if and just a in it

that you it MSRs are the you're drifted average noticed as on servicing was average went X.XX%, be how and it coupon that much was? X.X% seem the would selling from weighted coupon what selling the And which that well, lower-coupon then to I might higher that [indiscernible]

Mathew Ishbia

little coupon a average weighted rates, The higher. average weight our on is Yes.

think because mostly now. I lot right a of we that's loans do

obviously doing we're $XX going your So WAC business of billion That's X.X%. at up. drive to average

it. nothing got it's with do So to

sold higher loans. services all WAC tied to do some originate a we we We some sales, and of some lot WAC. It's lower

they So as business the you mortgage much in. lenders' because move see numbers [indiscernible] that do business, other won't don't we're

So that's we're kind what of seeing.

Kevin Barker

portfolio So do little which And to a and is rates what of softening future? a X% may coupon? of percent an present than WAC has then of we bit refinance now see opportunity -- greater or the in your

Mathew Ishbia

X%. I you a that why know look, The now loans but what usually -- arbitrary -- I it's we're I looking picked over number, random sort to doing X%. don't at. got don't that WAC with have number, do of nothing just we're

So that loans now X%. are do we even X.X%, And like than happened They're with loans that's we are X.X%, usually rates. X% higher the X%, did before probably what because actually lower all rates.

follow ] [ you think I the market.

really through. no sense that would go make data there's there to So

Kevin Barker

I'm higher was question. how [indiscernible] sorry, servicing I just much coupon? more or about the maybe more about... WAC higher it of -- big It portfolio, is That was average how the

Mathew Ishbia

the Once of lower. breakdown is not got again, aspect we of we ago relevant exact We are that This loans lot don't originate business. loans loans. a them. of the were like the had have higher. from I The years in any

So -- for question. but the thank you

Operator

the Goberman question next ] Securities. from from JMP Mikhail line comes Your [ of

Unknown Analyst

do see that industry you terms the see you affecting volumes, say, the next to company recession MSR If affecting my a we United operationally, scenario Wholesale, consumer end guys margins do hopefully, guys the of of Just how the do [indiscernible]. kind come get in middle book? year, definitely, financially for sort question of hypothetical more the, in And And let's how competitively? of part some from scenario won't and that here. a specifically

Mathew Ishbia

Yes.

check you and data, really of recessions market lower mortgage throughout So the obviously, the been successful. interest in out with almost are and rates recessions track has with usually this history, led can

actually our a more for more more there recession, actually mean even be [indiscernible] rates. their will argue going business really to rates because of houses, people lot if was purchases, lower would then opportunity. that sell refi lower So it's I activity, a good And

that that happens. And so really no there's if negative to

of a seen people. them you've the mortgage for lose money bunch years worst time. mortgage what A think lot be I the of is laid lenders. them lenders business. X And have the a lot of in all can gone off A of out last of lot it have

we the strongest for we lot the are of we've but obviously, in company mortgage prepared made the And a also are money, We're And next hiring. country. opportunity.

it's do what really of or opportunity do a that And or comes, Fed war because other But the lenders inflation because rates whatever lowers in will are drop, the all a or best rates glimpse into we've lenders because so now because of seen when happen, markets. may recession whether well. the or of future these of some when

the quarter forward. whatever we'll be so seen we'll And lower be prepared whether happens, and quarter And in you've the for rate. meantime, to recession to after a win successful or continue as going

the So it. for you we appreciate Thank question.

Operator

will turn for up portion. closing some Ishbia Mat wrap the would back Q&A to I the call to That over like remarks.

Mathew Ishbia

talk No, the thank you great call, time Have being appreciate today. we'll quarter. in you forward you. day. to for look and great soon. And Thank you a the We all guys on to the fourth quarter another

Operator

conference today's concludes This call.

You disconnect. may now

UWM (UWMC) 8 Nov 232023 Q3 Earnings call transcript