Pontiac-based United Wholesale Mortgage reports 1st full-year loss

Pontiac-based United Wholesale Mortgage saw a nearly $70 million net loss in 2023, yet says it managed to retain its title as the nation's top mortgage lender by volume in what was a down year across the mortgage industry.

That full-year loss — the company's first since going public in 2021 — was driven by a fourth-quarter loss of about $461 million, according to an earnings report released Wednesday morning. Previously, UWM had a $932 million profit for all of 2022.

UWM CEO Mat Ishbia said the big loss last quarter was the result of a markdown in the value of the company's mortgage servicing rights, and that UWM remains operationally profitable.

UWM also reported adding 700 employees during 2023, which brought its total headcount to about 6,700 as of Dec. 31. All of those employees work out of UWM's corporate campus in Pontiac.

Ishbia, 44, an owner of the NBA's Phoenix Suns, told investors in a late morning earnings call that “2023 was one of the best years in UWM’s history."

"It wasn’t the year that will stand out from a financial perspective, but will stand out from a dominance perspective," he said.

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The corporate parent of UWM's Detroit-based rival, Rocket Mortgage, last week also reported its first full-year loss since it went public of $390 million for 2023. Rocket Companies' employee headcount fell during the year to 14,700 from 18,500.

UWM, a nonbank lender, said it did $108 billion in total mortgage originations last year, down 15% from 2022. Of those loans, $93.9 billion were for-purchase mortgages, which was a company record.

Ishbia told investors he expects to do more business this year with more profitable per-loan margins compared with last year.

He said he anticipates seeing significant industrywide mortgage refinancing activity once interest rates on 30-year, fixed-rate mortgages dip below 6%. Those mortgage rates averaged just under 7% last week, according to Freddie Mac.

"It’s been a couple years now where people have been doing loans at 6.5%, 7%, 7.5%," Ishbia said. “We’re doing the most loans of everyone, so I know (at what rates) the loans are being done."

Ishbia added that he also anticipates an uptick in for-purchase mortgage business across the industry once rates hit the level where refinancings happen again.

“I think it’s going to be a very, very positive environment," he said. "Whether that happens tomorrow or in three months or six months or nine months, it’s going to happen —we just don’t know when.”

UWM is the first No. 1-ranked mortgage lender to operate entirely by underwriting loans for independent mortgage brokers, known as "wholesale" lending. Top lenders have traditionally written many mortgages directly for consumers, or retail lending.

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