United Wholesale Mortgage reported $212.5 million in net income for the third quarter, reversing a $451 million loss in Q2 driven by expense cuts and gains on mortgage servicing rights sales. The Pontiac-based wholesale lender closed $33.4 billion in mortgages in Q3, down from $39.7 billion in Q2, as higher rates pressured originations.
UWM signed a $2.05 billion capital package with Oaktree Capital Management and the Ishbia family to strengthen its balance sheet. The deal includes $1.65 billion in preferred equity plus a $400 million rights offering to existing shareholders.
Expenses fell 10% to $576 million in Q3. CEO Mat Ishbia attributed the decline to investments in AI and technology made over prior years. The company brought in 700,000 loans to service in-house this year.
Gain-on-sale margins compressed to 124 basis points from 133 bps in Q2. Ishbia told analysts margins should remain stable because customers choose UWM for reasons other than lowest rates.
UWM's mortgage servicing rights portfolio grew to $269.8 billion in unpaid principal balance by quarter end, up from $247.6 billion on June 30. The company plans to sell $70 billion to $80 billion of MSRs in Q4 2026 and expects more than $1.8 billion in proceeds. Ishbia said servicing values are at their richest levels in more than two decades.
Net non-funding leverage ended Q3 at 1.77x. Ishbia expects the company to reach below 1.5x by year end, depending on interest rates and market conditions. UWM plans to use MSR sale proceeds and rights offering gross proceeds to pay down nonfunding debt.