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UWM Reports Strong 3Q 2021 Financial Results

Nov 09, 2021
Uwm front building with sign

Revenue, earnings per share beat analyst expectations

UWM Holdings Corp., the publicly traded indirect parent of United Wholesale Mortgage, today announced third-quarter earnings of 16 cents per diluted share, beating analysts’ expectations. For the quarter ended Sept. 30, 2021, UWM reported net income of $329.9 million and diluted earnings per share of $0.16, topping the consensus expectation of 15 cents per share.

Loan origination volume for the quarter was a record $63 billion, which included $26.5 billion in purchase volume, the company said. Net income for the third quarter included a $170.5 million decline in fair value of mortgage servicing rights (MSRs).

UWM Chairman and CEO Mat Ishbia said the company again broke records for its overall originations and purchase originations, “demonstrating continued momentum for both UWM and the broker channel.”

He cited the company’s newest technology launches — including BOLT, The Source, and UWM Appraisal Direct — and said they “are just another in a long line of technology initiatives that UWM has pioneered over the years for the benefit of independent mortgage brokers, and by extension, consumers that are wise enough to use them rather than our retail competitors.

“Now more than ever,” he added, “the broker channel is the fastest, easiest and cheapest way for a consumer to get a mortgage."

Some key third-1uarter 2021 highlights:

  • Originations of $63 billion was a 16% increase from $54.3 billion in the third quarter of last year and a 6% increase from $59.2 billion in the second quarter of 2021.
  • Purchase originations of $26.5 billion were a 119% increase compared to $12.1 billion in the same quarter last year and a 10% increase from $24.1 billion in the second quarter.
  • Total gain-on-sale margin in the third quarter was 94 bps, down from 318 bps in the third quarter last year but up from 81 bps in the second quarter.
  • Third-quarter 2021 net income was $329.9 million, inclusive of a $170.5 million decline in fair value of MSRs, vs. $1.5 billion in net income in the third quarter of 2020 inclusive of $68.9 million of expenses related to amortization, impairment, and pay-offs of MSRs, and $138.7 million of net income for the second quarter inclusive of a $219.1 million decline in fair value of MSRs.

UWM reported total equity of $3 billion as of Sept. 30, up from $2 billion at Sept. 30, 2020, and $2.7 billion as of June 30, 2021.

The company also launched three new technologies in the third quarter, stating they are intended to speed up the loan process and help independent mortgage brokers grow their business. They include:

  • BOLT, which allows broker clients to obtain an initial underwrite approval for qualified borrowers in as little as 15 minutes;
  • UWM Appraisal Direct, which it said will streamline the appraisal process to deliver faster appraisals and a long list of benefits to appraisers and borrowers alike, and
  • The Source, a mortgage search engine that learns from past searches and allows for creating a personalized hub for every UWM broker client.

UWM said it maintained an average “application to clear to close time” of approximately 19 days in the third quarter, while estimating that the industry remained at an average of 43 days, according to the August ICE Mortgage Technology Origination Insight Report.

The company also said its 1.01% 60+ days delinquency and 0.83% forbearance rates, as of Sept. 30, are significantly better than the industry averages of 3.91% and 2.62%, respectively.

During a conference call on the financial results, Ishbia said the company is "well on its way to our seventh consecutive year of origination growth," and is building toward being the No. 1 purchase mortgage company in the U.S. 

He also said because the company is building its purchase volume and is a wholesale lender, it is "not a victim of margin compression" that is affecting other lenders.

"We control the margins," he said, "and others have to react to us."

About the author
David Krechevsky was an editor at NMP.
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