In This Article:
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Total Production: $39.5 billion for Q3 2024, the largest in three years.
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Purchase Production: Over $26 billion in Q3 2024.
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Refinance Production: $13.3 billion in Q3 2024.
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Gain Margin: 118 basis points in Q3 2024.
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Net Income: Nearly $32 million in Q3 2024.
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Total Production Volume Year-to-Date: $100.8 billion, a 20% increase from the same period in 2023.
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Year-to-Date Gain Margin: Increased to 111 basis points from 92 basis points last year.
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Total Cash: Over $600 million at the end of Q3 2024.
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Outstanding Lines of Credit: $300 million at the end of Q3 2024.
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Net Cash Proceeds from MSR Sales Year-to-Date: Approximately $2.6 billion.
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MSR Portfolio: Approximately $212 billion at the end of Q3 2024.
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Total Accessible Liquidity: Approximately $2.5 billion at the end of Q3 2024.
Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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UWM Holdings Corp (NYSE:UWMC) achieved its largest quarterly production in three years with $39.5 billion, surpassing guidance.
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The company reported a significant increase in purchase market share, growing approximately 300% since 2019.
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UWM Holdings Corp (NYSE:UWMC) maintained profitability with a net income of nearly $32 million despite a $446 million decline in MSR fair value.
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The company has been the number one lender for three consecutive years and the top purchase lender for four years.
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UWM Holdings Corp (NYSE:UWMC) has a strong liquidity position with over $600 million in cash and $2.5 billion in accessible liquidity.
Negative Points
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The anticipated refi boom has not fully materialized, impacting potential revenue growth.
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The company experienced a $446 million decline in the fair value of MSRs due to changing interest rates.
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Market interest rates have impacted MSR values, affecting overall financial performance.
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The mortgage market remains challenging with 2024 on track to be the lowest year for existing home sales since 1995.
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UWM Holdings Corp (NYSE:UWMC) faces increased competition in the broker channel, although it maintains a strong position.
Q & A Highlights
Q: In the EBITDA bridge, is the line item gain on other interest rate derivatives related to hedging the MSR? A: Andrew Hubacker, CFO, explained that they do not hedge MSRs. The interest rate derivative is not a hedge but a strategic decision made with the risk committee to address market conditions.
Q: What were the factors affecting gain on sale margins in the quarter? A: Andrew Hubacker noted that a brief period of favorable interest rates allowed for increased refi activity, boosting margins and volume. This situation provided a glimpse into potential future performance if rates decline further.