UWM (NYSE:UWMC) reported $33.4 billion in third-quarter loan volume as the mortgage lender looks to reduce expenses, sell mortgage servicing rights and strengthen its capital position in a challenging housing finance market.
CEO and Chairman Mat Ishbia said the company was profitable during the quarter and expects artificial intelligence investments and the transition of loan servicing in-house to help lower costs. He also said UWM’s partnership with Oaktree had strengthened its capital structure and liquidity.
“The mortgage market’s got a lot of headwinds right now,” Ishbia said, while adding that he believes UWM is positioned to benefit from its investments in technology and its relationships with mortgage brokers.
Expense Cuts and Servicing Transition
Ishbia said UWM can approach $2.1 billion in costs in 2027, compared with the $2.3 billion third-quarter run rate cited in an analyst’s question. He said expenses fell approximately $58 million to $59 million from the prior quarter and called $2.1 billion a reasonable target, although higher loan volumes could increase variable costs and interest expense.
The CEO attributed some of the recent savings to investments in AI and technology. He said UWM has capacity to handle twice its current loan volume and expects its technology investments to support both cost reductions and business growth.
UWM has also brought 700,000 loans onto its in-house servicing platform, Ishbia said. The company previously incurred costs from both outsourced and internal servicing during the transition. He said UWM expects to focus on efficiency and optimization in 2027, with potential savings and improved customer retention.
Mortgage Servicing Sales and Leverage
Ishbia said UWM’s sales of mortgage servicing rights, or MSRs, create cash and help the company reduce risk and leverage. He put 2026 sales at roughly $135 billion to $140 billion, compared with $180 billion in 2025, and said much of this year’s activity was concentrated in the fourth quarter.
Asked about the timing of fourth-quarter sales and how prices compared with the company’s marks, Ishbia did not provide a completion schedule. He said UWM was comfortable with its current marks but that large sales can carry a liquidity discount. The company may consider smaller sales in 2027 to attract more buyers, he added.
Ishbia said UWM’s leverage was approximately 1.7 to 1.8 and that the company was targeting below 1.5 by year-end. He expects leverage could reach 1.2 to 1.3, or potentially lower, depending on interest rates and market conditions.
While UWM expects to grow its servicing book as it originates loans, Ishbia said it will continue to sell assets opportunistically. He also said the company would evaluate its MSR hedging strategy quarterly. UWM is not fully hedged, he said, and can offset some decline in servicing values when rates fall by originating more loans.
Fourth-Quarter Outlook and Capital Allocation
Ishbia said fourth-quarter loan volume would not be higher than recent levels and that he would not project $40 billion to $60 billion for the period. He noted that the fourth and first quarters are traditionally more difficult for the mortgage market. UWM’s focus on purchase loans makes him less concerned about a volume decline than at lenders more dependent on refinancing, he said.
UWM generated more than $10 billion in refinance volume during the third quarter, according to a question addressed on the call. Ishbia credited the company’s broker network and products including TRAC+, which he said generates revenue and saves consumers money.
On gain on sale, Ishbia said he expects fourth-quarter results to remain within the 115-to-130 range cited by Morgan Stanley analyst Jeff Adelson, though he allowed for the possibility of a slightly higher or lower outcome.
Asked about repayment of the Oaktree financing, Ishbia said it was a priority but did not provide a firm timetable, citing uncertainty about market conditions and future income. UWM would use earnings to help pay it down, he said, and is prepared for various repayment timelines.
The company is also considering how to use cash from MSR sales and other capital sources. Potential uses include paying down MSR lines, buying back bonds, investing in AI and repurchasing common shares, Ishbia said. He noted that the Oaktree financing is locked in for two years and emphasized the value of maintaining liquidity.
About UWM (NYSE:UWMC)
UWM Holdings Corporation, through its principal subsidiary United Wholesale Mortgage (UWM), operates as a wholesale mortgage lender in the United States. The company provides residential mortgage loans through a network of independent mortgage brokers, who work directly with borrowers and submit applications to UWM for underwriting and funding.
UWM offers a range of home loan products, including conventional, government-backed, jumbo and other residential mortgage programs. Its platform also provides brokers with technology, loan processing, underwriting and closing services designed to support the origination of mortgages for home purchases and refinancings.
United Wholesale Mortgage traces its history to 1986 and is headquartered in Pontiac, Michigan.
