United Wholesale Mortgage lost $461 million in net income in the fourth quarter of 2023, but a much smaller loss of $69.8 million for the full year.
The company attributed the loss to the decline in the value of mortgage servicing rights. In 2022, the company had a net income of $931.9 million.
“2023 was one of the best year's in UWM history,” UWM Chairman and CEO Mat Ishbia said during an earnings call. "It wasn't a year that will stand out from a financial perspective, but from a dominance perspective."
He said the gap between UWM and its competitors is only getting larger and for the second year in a row they are the largest non-bank mortgage lender.
“We continue to be operationally profitable— the true measure of a mortgage originator's health, while our financial loss was driven by the MSR markdown which is a result of interest rate movements,” Ishbia said. “Our recipe for success has not and will not change and we are currently doubling down on investing in our people, our products and our technology so that we can continue to provide the broker channel with the tools needed to win. I believe that 2024 is a tremendous opportunity for both UWM and the broker channel."
The company originated $24.4 billion in loans in the fourth quarter, which is down from $29.7 billion in the third quarter. For the full year it originated $108.3 billion in loans, compared to $127.3 billion in 2022. When it comes to purchase volume for the year, UWM reported $93.9 billion in origination, which is 3.4% above 2022's $90.8 billion.
Total gain margin was 92 bps in 2023 compared to 77 bps in 2022, but lower than the 97 basis points in the third quarter.
He said two out of 10 loans are originated by brokers and it’s growing to 2.5 out of 10 loans.
“UWM and the broker channel are ready to dominate in 2024,” Ishbia said.
In the fourth quarter of 2023, UWM's servicing portfolio stood at $299.4 billion in unpaid principal balance (UPB), slightly lower than the $312.4 billion recorded in the same quarter of 2022. However, it showed growth from the third quarter of 2023, which reported a portfolio value of $281.4 billion.
UWM says it anticipates first quarter production to be in the $22-$28 billion range, with a gain on sales margin from 80 to 105 basis points.
The company ended 2023 with $2.2 billion in liquidity, including $497.5 million of cash, and $1.75 billion of available borrowing capacity, which includes $1.25 billion under lines of credit secured by agency and Ginnie Mae MSRs, and $500 million under an unsecured line of credit.
In the fourth quarter, the company launched a tool for independent mortgage brokers, to send thank you items to borrowers and real estate agents. It also launched enhancements to its Debt Service Coverage Ratio product that allows borrowers to close with a limited liability company on their investment properties.
For the thirteenth consecutive quarter, the company's Board of Directors declared a cash dividend of $0.10 per share on the outstanding shares of Class A common stock. The dividend is payable on April 11, 2024, to stockholders of record at the close of business on March 20, 2024.
