Inside United Wholesale Mortgage’s plan to topple Rocket

HW+ Mat Ishbia

Weeks before United Wholesale Mortgage (UWM) went public in a SPAC deal that valued the lender at $16.1 billion, its president and CEO Mat Ishbia said observers shouldn’t expect a different United Wholesale Mortgage or a different Mat. He proved it in his first earnings call.

On Thursday morning, Ishbia, in his characteristic fast-talking bravado, bragged about the wholesaler’s position as the biggest purchase lender in the market, cautioned that they’ve prioritized the long game over short-term profits, teased new technology offerings to come in 2021, outlined scenarios in which UWM dominates when interest rates rise, laughed about how other lenders take 54 days to close a loan when he does it in 18, and repeatedly told investors that his company’s strategy was far superior to that of its arch-rival, Rocket Mortgage.

The numbers for the fourth quarter were indeed impressive – $54.7 billion in originations, $1.33 billion in income, margins at a very healthy 305 basis points. In fact, UWM originated more than $182 billion in mortgages in 2020, generating about $3.37 billion in profits. Incredible numbers.

Ishbia told analysts that the company doesn’t see originations or margins normalizing in 2021, giving the firm another year of big profits and further investment in technology.

And yet, despite those eye-popping numbers and proclamations to reinvest in the company, UWM’s stock fell about 10%.

HousingWire took a closer look at how United Wholesale Mortgage plans to grow market share, who it intends to steal it from, the larger question of mortgage cyclicality, and why Ishbia thinks Rocket Mortgage’s strategy is ultimately flawed.

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