It’s official. United Wholesale Mortgage (UWM) is the nation’s largest mortgage lender.
The Pontiac, Michigan-based wholesale bank took the top spot for all of 2023 after handily beating out previous No. 1 lender Rocket Mortgage.
In total, the company financed $108.3 billion in residential loans during the year, compared to Rocket’s $78.7 billion.
Crosstown’s competitor Rocket, based in Detroit, has been the nation’s largest mortgage lender since 2018.
Before that, Wells Fargo was the best, though the San Francisco bank has steadily shrunk its real estate footprint over the years. However, they are still in third place.
UWM generated the most loan volume of any mortgage lender for all of 2023
Similar to their predecessors, UWM was able to beat the rest of the competition in a quarter or two before reaching the top of the heap.
But they finally achieved an outright full-year victory in 2023, without even needing to produce Q4 production of $24.4 billion. This is very impressive.
Of course, it wasn’t all good news. The company still sees year-over-year production declines from $127.3 billion in 2022.
They lost money last year too. UWM registered Net loss of $69.8 million in 2023 compared to $931.9 million net income in 2022.
Although UWM Chairman and CEO Matt Ishbia said they were “operationally profitable,” the loss was a result of MSR rate cuts related to interest rate movements.
Given how difficult this year has been for the mortgage industry, they’re probably happy to be where they are.
They also saw year-over-year gains in the jumbo loan category and non-qualified mortgage products, which include newly launched home equity lines of credit (HELOCs).
UWM claims the top spot despite being a wholesale-only lender
Perhaps what is most striking about UWM’s rise to the top is the fact that it only operates in the wholesale channel.
This means that they do not have any retail operations, and instead rely on mortgage brokers to bring business to them.
So, if you want to work with them, you have to go through a mortgage broker first.
Meanwhile, several other mortgage companies, including Rocket Corporation, have retail and wholesale operations.
So this speaks to the huge push UWM has made to reach the top spot, as well as the rise in mortgage brokerage share overall.
In the early 2000s, mortgage brokers were blamed for the housing crisis that occurred. Today, they seem to be back in full force.
And it wasn’t just mortgage refinancing that brought them to peak position. It’s mostly purchase lending, which is usually more personal and close to home.
Ishbia also noted that the company was No. 1 in wholesale lending for the ninth year in a row.
In case you weren’t aware, he recently purchased the Phoenix Suns and Mercury.
UWM is the leading home equity lender in the country as well
Recently, the mortgage market has become decidedly buy-driven. With mortgage rates approaching 7% to 3%, very few borrowers are refinancing.
Despite this shift, UWM was able to secure a record $93.9 billion in home equity loans through 2023.
This total alone was more than enough to beat the second-largest bank, excluding its refinancing business.
This meant that their procurement business did much of the heavy lifting, accounting for approximately 87% of the total loan volume.
This business rose from $90.6 billion in 2022, $87.3 billion in 2021, and $42.9 billion in 2020.
Meanwhile, mortgage refinancing volume totaled just $14.4 billion during the year, down from $36.5 billion the previous year.
Assuming mortgage rates improve in the future, UWM could see its production increase significantly.
Regarding 2024, they expect first-quarter production to range from $22 to $28 billion, compared to $24 billion in the first quarter of 2023.
So it looks like they will stay at the top of the rankings for a while, although if Chase wanted to, he could probably make a push as well.
I should have a full list of the top mortgage lenders for 2023 soon.
Source link
