Try to go through every one of them, at least try to get through every one of them, hopefully make it as effective for everyone as possible. Before I get into that, obviously from a second-quarter perspective, operating income over $180 million, EBITDA, adjusted EBITDA along with about $40 billion of business.

We feel really good about UWM and and the strength of the broker channel and the growth of the broker channel. We feel great about where that's at.

Obviously I got so many questions about Oaktree partnership, the dividend, Two Harbors, the hedging. We're going to get through all that stuff, and I'll try to get through it.

Before I get into it, I wanted to start with the overall picture from where we are at UWM and the partnership with Oaktree. We feel great about Oaktree and the partnership that we have and are creating.

Oaktree's not just capital, they're strategic partners of ours. They have MSR background, non-agency, like they have a lot of mortgage-related, and they're betting on housing, and they're betting on UWM.

We're excited about the partnership and what it's going to do for our business long term. That's what we always think about is how do we dominate long term?

The mortgage market's been tough for the last 5 years now, and UWM has consistently made operating income, and Two Harbors recognized the strength of our business and says, "Hey, how can we take this to the next level?" From a strategic perspective, we see a lot of the same vision about the brokers, about the operating model and infrastructure that we built to help the independent mortgage channel grow and dominate.

That's really what we're about here at UWM. Housing and mortgages are going to be here and be strong.

It's a huge market, and it's been a tough 4, 5 years. We expect the next 4 or 5 years to be significantly, significantly better.

In the tough years, we still are successful and profitable at UWM, as Oaktree points out many times when we spent time with them. Now it's like how do we take it to a whole another level?

The balance sheet is fortified, the debt ratios that people were concerned about are are a non-question anymore, and we're ready to go forward in a really, really strong way. With that being said, I know there's AI questions, there's dividend questions, there's So let me just go into all these questions and hopefully answer all of them.

I'm going to try to mention a couple of people that asked the questions, but to be fair, I think we got the same questions from about 15 different people, I won't try I won't do too many. Let's just start, I guess, with the dividend.

I got some questions: Jason Stewart, Bose, Jeff Adelson. I got a lot of people, I'm not going to name everyone's name that that asked the questions.

The basic question is, "Hey, Mat, UWM, why are we cutting the dividend now?" The first part, how we got here, a lot of things tied to the dividend.

We've always rewarded our shareholders, and we feel good about rewarding our shareholders, and we're going to always look at ways to do that. The decision to cut it right now is just capital allocation.

Right now our after this transaction, after the $2 billion-plus, which is the largest capital raise, I think, in mortgage history, we're going to have over $3 billion of equity. How do we continue to build on that going forward?

The dividend obviously comes takes out from that, and we made the decision that the right thing for our business for the long term is to continue to build up equity, continue to solve for the debt ratios, which are significantly are well below industry norms now with the with the capital infusion, and and run the business the most effective way. Will there be special dividends down the road?

Possibly. Will there be Will we go back to regular dividend?

Possibly. Like once again, we look at that stuff every single quarter, but the reality is, liquidity matters, equity matters, and we have the best operating business and infrastructure for brokers to grow and dominate.

If I can make sure the capital and liquidity are in a great position, then all the rest takes care of itself. Once again, it's been a tough 4, 5 years in the mortgage industry.

The next 4 or 5 years are going to be significantly better. Oaktree believes in that.

They believe in housing. They believe in UWM, and and so do we.

Do I, obviously. That's how I think about the dividend.

It's just the right time to pause that and suspend that process. Then we'll always reevaluate every quarter with our board of directors and see what's best.

Right now, I see a going-forward path of let's retain equity, retain earnings, continue to build, continue to grow, and take advantage of the market that we have in front of us. All right.

Let's see. Two Harbors, I guess we can talk Two Harbors.

A couple of questions on, the transaction. Let me just Did Did that create the need for capital?

I don't really look at it that way. Here's what I'll say.

The The way we look at it is, how do we make sure we have a good amount of equity, we have good ratios, and we have a fortified balance sheet? That's a big part of why we did the capital raise.

It's not just capital, because if it was just capital, I could put money in myself, or we could get random people to put put capital. This was a strategic partnership with Oaktree because of their MSR background, they have a whole and also just their knowledge and their sophistication on capital markets, which will help us in so many ways.

We're excited about the partnership. Now, the Two Harbors transaction, it definitely was unfortunate how it happened, and you'll see some litigation and some things that they did inappropriately, and we'll we'll go through that process when that time comes.

However, I'm not going to spend my time talking about that. What I'm going to talk about is that Two Harbors transaction, was one of the strategies of helping from a cash, liquidity, and equity perspective.

When that did not go the way we expected, we have another option. It's great to have options, and once again, Oaktree wrote a massive-sized check to be part of this and to be next to me and UWM and help us grow together.

If the deal would have closed, maybe, the Oaktree thing would not have happened as quickly. The silver lining is Oaktree has so much better partnership for us than Two Harbors or anything else would have been.

I think of it as a as a long-term upside for UWM the way it all played out. We'll go through the litigation process with Two Harbors and CrossCountry and some of the inappropriate things that happened in that deal at that time.

I think that covers Two Harbors. Trying to think if there's anything else that links to the other Two Harbors questions.

Let me go into the hedge loss, because I think that's a handful of other questions here. Can you please Can you please explain the hedge loss, what caused it, how investors should think about it?

Listen, hedging in general in the mortgage industry is expensive, and it's something I actually don't believe in in general. We've never hedged our MSR—I shouldn't say never, we don't traditionally hedge our MSRs.

Our origination machine is so big and strong that if the rates drop, you'll lose MSR value and equity, but you'll do so much more business that you're good. If rates go up, your MSR values go up, and you do less originations, but your equity goes up.

That's kind of how we've always played it. When you're going through and acquiring a company like Two Harbors and a and a massive MSR book, then our MSR book became double the size of what we've always managed, and therefore, it created a little more risk.

When we did put a hedge on to protect against that risk, and then a lot of things happened, let's just be real, with whether it's a a war, a lot of different things that happened that that created the 10-year to go up, and then obviously the Two Harbors transaction went away. A confluence of events that created a a hedge loss.

We hit a certain risk threshold, and I said, "Listen, we're not going to continue hedging regardless, because we didn't want to have more of equity drain." We took the hedge off.

Of course, that's the strategy that we've always had is let's not hedge. Let's run the business effectively.

Once again, Oaktree has a strategic perspective on this, and I'll go through that with them after this process and whether we hedge going forward or not. Once you have $3 billion equity, you're really not at a risk of MSR values go down $400 million for this quarter or go up $400 million, it's less relevant.

When you're hovering around $1.5 billion or $2 billion, it becomes a little bit more relevant. That became an issue.

We hedged, and it was a one-time event, to be honest with you, because of Two Harbors. We were overhedged, if you think of it that way, protecting against the the Two Harbors transaction.

The market moved against us, and it's a one-time event that won't happen again. We feel like our hedging policies are much stronger now, but also we're not acquiring another company that has an MSR book like that.

At least that's not the plan of now, and we know how to handle it differently going forward. I think that covers it.

It was a transaction-specific event. It's not a reflection of our operating business by the way at all.

As you guys know, as I pointed out at the beginning of the call, $160 million to $200 million of adjusted EBITDA almost every quarter consistently, a little bit higher than that if you look at the numbers, but we're consistently making that much money. What did management learn from the hedge loss?

I kind of covered this one. Unique circumstance, traditionally we don't hedge MSRs at UWM.

Definitely with the size book we have right now, we wouldn't be hedging MSRs at that level. Once again, the market moved in a certain way, and it was an event that obviously unfortunate and not planned and not expected.

At the same time, we're looking forward now and and know what our business is about. Operating business is great, the balance sheet is fortified, it has never been stronger.

I even looked at the balance sheet from 2020 and 2021, I think $3 billion is kind of the high-water mark, and we're going to be at that number when this capital raise is done. At the same time, after another quarter or two of earnings, as we're going to have, it will continue to grow.

With no dividend, that will make our balance sheet strong, liquidity strong, and then just let's continue to build and dominate, helping independent mortgages operate in this housing market with AI, all the things that we've really been building for years and years here at UWM, and now go to the next level. I think that covers those.

Let me see if there's any other ones. Let's talk now there's a bunch of Oaktree questions, obviously, let me talk about that.

Talked a lot about it already, but why is Oaktree the right partner for UWM at this point of the cycle? First, Oaktree has a great background, great reputation from their their leadership to also just their mortgage knowledge and their housing belief.

They believe in housing, they believe in UWM, and we partnered together. Once again, my background has always been, "Hey, I'll just do it myself.

We don't really bring outside parties in." That was really the path we were going until we started having some in-depth conversations with Oaktree, and I realized the strategic benefit of bringing someone in next to me.

Instead of Mat putting in a billion or more, Mat will put in 500, $550 million. These guys put in a billion, billion five, and that's kind of the way how we get to $2 billion.

That was the strategy there, but it's strategic money. It's not just capital.

We can get capital from anyone. Strategic partner, we're going to have a a a member or two on the board as well.

They're going to have some different conversations, and they have different belief systems on things that maybe can help us. They also believe heavily, heavily in the strategy and the vision of the UWM, the broker channel, the independent market.

I wouldn't be aligned with someone that didn't believe strategically in the same thing from housing, from the infrastructure we built for brokers, the AI investment that we're making and continue to make. They they're aligned with us and how we're doing things.

I think it's really been a perfect match. They understand the cycles of the industry as well.

They understand that in most cycles, most mortgage markets, it's every 6, 7 years, it's $15-plus trillion of mortgages, and, the last 5 have not been that. They know the good years of the 2, 3, $4 trillion years are most likely coming in the next 3, 4, 5 years.

They understand that right now is an amazing time to be partnered with UWM. I understand that as well, which is why I put a lot of money in as well.

Obviously I'm the biggest shareholder and also big in on this deal as well. We believe in the market, we believe in UWM, and Oaktree is a great partner in that respect.

Let's see. Let me see if I can cover more Oaktree.

A lot of Oaktree questions here. Some people look at the size and cost of the transaction and and and think, "Is this How do we think about this from a strategic benefit?

Is this, Oaktree is getting a great deal?" is what people say there, which they are, and they should get a great deal.

We're happy for them. When Oaktree makes a lot of money, does every shareholder, does UWM.

Everyone's going to win together. I I I don't I don't begrudge anyone for making a lot of money next to me.

I wish them all the best, along with everyone. When the warrants become very profitable I guess one of the questions kind of tied to the When the warrants become very profitable, I think everyone that owns shares today will make a lot of money as well.

The way we look at that is, yeah, there's a lot of different pieces to it, and Oaktree wrote a $1.5 billion check. I'm putting in up to $550 million.

I believe that that's an opportunity for everyone to succeed, and it's putting the common shareholders, the debt holders, all in a better long-term position. That's my job: to run the business the most effective for the long term, not for whatever today is, August 6th.

It's not about August 6th, it's about '27, '28, 2030, 2032. Anyone that's partnered with us, Oaktree being one of them, me being a big shareholder, and a lot of the shareholders on the call and people that pay attention to what we talk about, everyone's going to win together.

It's about UWM and the operating platform, the AI, the technology that we built to dominate for the long term. Now our balance sheet is fortified and in a great So, yes, Oaktree is getting a great deal, and I'm happy for them.

When they make a boatload of money and are very successful, will most of our shareholders, and a lot of our shareholders will make even more because of based on where the stock is today. Excited about everyone's winning together, and we're going to continue to win going forward.

Let's see. I think there's a question here about debt ratios and equity.

The key thing is the total equity increases from a billion to roughly $3 billion and growing, right? The non-funding debt-to-equity declines from it was, with with the end of the quarter, it it jumped up to a really high number because of the the hedging and the and the negative we had in the second quarter to over 5x, or I think it was 5.6, but now we're down to 1.2x.

So 1.2 is well below the industry norms. Most people operate 1.5 to 2, maybe a little higher than that, but we'll call it 1.5 to 2.

We're well below it, and we have plenty of room to grow. We feel really good about where we are right now from a debt-to-equity ratios and overall our business and balance sheet.

The key thing for me here on the Oaktree, the Two big question kind of talks to the $2 billion capital raise and how that handles for debt ratios and and equity. I think in general it's a real big positive.

Anyone wants to take a step back and says, "Is the company stronger today than it was 6 months or a year ago?" anyone would say yes.

Everyone would say yes. That's what I think about right now is how are we positioned for the future?

We have never been better positioned, not because of just the equity and capital and liquidity, which of course is a big part of it, but also the Oaktree strategic partnership and all that they bring to the table. Then on top of that, we are the best and biggest mortgage originator in America.

We brought servicing in-house, we're dominating in that respect. I know there aren't that many questions about all these things operating-wise, which I understand why, but that's okay.

Operating-wise, we have a massive moat around our business, the broker channel is growing, and the infrastructure that we are built we've built and the AI we built to help power them to grow even further and waiting for not only big years, because those will happen, but just the normal mortgage years in a traditional mortgage year. Even these bad years, we've been doing really well operating income-wise.

We feel really good about the business and where we're where we are at right now. Let me see.

I guess there's a couple of people asking Michael Goberman's and, a couple of people asked about why choose preferred equity with warrants instead of issuing common stock? First off, a large issue, common issuance at current levels would create, significant and immediate dilution.

We can talk about dilution. The preferred equity raise, permanent capital in our business is is a better upside for the business in our belief system.

The warrants do create dilution, as people will ask about, and I understand that. To be honest with you on the dilution, because I know there's some dilution questions, it's definitely something we had to weigh heavily, you know.

However, the long-term benefit of us making significantly more money and building this business significantly bigger is the right decision for all shareholders, including myself. Although the dilution is real, the dilution is only really real at a high level when the warrants are in the money.

The average of the warrants are $4, which is significantly higher than our stock price, and a lot of the warrants are at $6. That's how I look at it.

This structure balances near-term capital with long-term shareholder upside, and, we did not want to, dilute the common shareholders more than necessary, and we feel great about where we're at right now and about what's going to happen going forward. Let's see.

I think I kind of covered the dilution question there too, but obviously you can have no more. By the way, I know I'm answering all these, and I appreciate all the questions.

After the call, whether it's me or our investor relations team or even people from Oaktree, we're all available to to talk through anybody's thoughts and strategies on all aspects of the business. We feel, once again, I continue to tell you, I feel excellent about the business, the fortified balance sheet, and the long-term strategic benefit of the Oaktree partnership and where we're going together.

Let's see. Okay.

Here's something that's interesting: How much interest savings does the transaction create? A lot of people asked, and there's another question that ties to, the the amount of the coupon that Oaktree is is receiving.

Right now a lot of the money that we're borrowing is between 6% and 8%, we'll call it. Yes, the the coupon on the on this new partnership is 10%.

It's so it's not 10% on $1.65 billion to start, because remember, and the question that you're basically asking here is, we are saving about $100 million by paying down MSR lines and paying off other things from an interest perspective, and then we're paying out $165 million in in this example on a on a on a 10%. It's not truly $165 million more of expense, because you have to net out the savings that we would be having, because we are paying from a capital perspective right now on borrowing money against our MSR lines or other other liquidity that we have.

Interest expense will go down roughly $100 million, but we're going to pay about $100 $165 million for the the pref money. I just want to make sure that's clear.

The questions talking about interest savings, yes, there are interest savings. I don't really look at I look at it as a net number, as it's slightly more expensive on that perspective, but not the full amount, and it's not interest savings overall, although it might look like that.

Let me see if there's other questions, a lot of Oaktree stuff. We can hit this.

The next one is about total potential dilution from the warrants. Once again, there's 330 million total warrants, 165 million warrants that can be exercised at $2, which is obviously higher than the stock price is today.

Most people won't exercise the warrants until it's it's well above $2 in that respect. I believe that those warrants are probably in the money more closer to $3 or $3.50 when people will exercise them.

Then the other half or 165 million warrants are at $6. Same concept there that they'll be probably exercised when they're higher than $6.

That's to answer that question, just I don't think there's much more to it than than just I think someone was just asking for clarification there. Jeff Adelson, Bose George, Mikhail, a bunch of people asked about So let's this is a little bit off of Oaktree now.

What happens to the MSR book from here if rates fall sharply? Here's what I'll say.

Rates fall sharply, that's a win for our mortgage business, right? The MSR, just like ours and everyone else, will get will have a writedown if you have a massive MSR rates drop.

When rates drop, though, our origination machine will kick in at a high, high level. If that happens, we're that's why I always what I kind of talked about earlier about the natural hedge and how we've always run our businesses.

We don't put a hedge on our MSR portfolio. We sit there and wait.

If rates go up, our MSRs are worth more. Rates go down, we do a lot more loans.

It's a win-win for our business. The only reason that was different in this situation was because of the Two Harbors transaction of having a double the size of MSR book, and obviously a war happening and a couple of different things happening all at once, and our equity levels being too low.

The confluence of those three things created us to hedge at the level that we did. I guess the long way of saying it'll be a really great thing if rates drop sharply, and we'll do a whole lot of loans.

Obviously we did $40 billion in a really tough mortgage market and $45 billion in the quarter before when rates were slightly lower. Overall, our origination machine can handle $250 billion to $300 billion as we stand today, if not more.

I hope rates drop sharply and we have to deal with MSR writedown. That'll be a fine problem to have because the origination machine will kick in.

We'll do $60 billion, $70 billion, $80 billion in a quarter at big margins, and the brokers will grow, we'll grow, and the overall shareholder base will be excited and positive about that about that opportunity. We'll see what happens.

We've been talking about rates dropping for a while. They haven't happened.

When they do, we'll be ready. All right.

Let's see. "Is UWM becoming a servicing-focused company?"

No. No.

UWM, we're like I said, I talk about it as we're we're big in housing, we're big in AI, we're big in infrastructure to help mortgage brokers build and grow the independent channel, but we're an origination machine. We have a moat around our business that people can't touch.

In the with some of these things happening, understanding that the the barriers to entry to compete with UWM is significantly higher than it's ever been. Even, back to 2020 and 2021 when we're doing huge amount of volume, the capital and liquidity requirements were not at the level they are today.

We look at that as a positive, because our balance sheet is now fortified at a level that, almost has never been done before at our size for our, for UWM perspective-wise. We're excited about it.

No, we're not a servicing-focused company. We will continue to build our servicing book.

We brought servicing in-house. I do see a question here, I'll kind of hit this at once.

Expenses are higher on the servicing side right now because I've got both, right? I got internal, and I'm still have an external with Cenlar.

Having external servicing and internal and then I also have to pay the offboarding costs. The servicing cost, I'm kind of getting double hit this year.

Next year, we'll see those big benefits that we've talked about now. You're kind of getting hit the double on that right now tied to the servicing.

We are not a servicing company. We are a origination company.

We're an infrastructure and AI technology company helping brokers dominate in this housing market, and we feel good about the moat around our business. The servicing book is definitely a nice thing that we have and will continue to grow, because we can originate loans at a level that almost actually I won't say almost.

We originate loans at a level that nobody in the market can do. Let me see.

Trying to think if I've covered all those. I kind of covered servicing portfolio higher rate perspective, obviously.

Scale is a big part of servicing, and, we are pretty close to that level. We obviously are one of the top 10 servicing books in America, but as we continue to grow And now one of the things that kind of asks the scale, are we going to continue to scale our servicing book?

Let me answer that one head-on. Can we continue to scale the MSR book?

In the way we look at it is with the equity that we have now, we will continue to opportunistically sell our servicing when the time is right. We don't have a need to sell.

If someone's going to pay a great price and it makes strategic benefit, we will sell the MSRs and bring in that cash and validate all that. Or if we feel like it's the right time to continue to build, we can do that.

That's one of the benefits of Oaktree: They have an intimate knowledge of the MSR book and the MSR asset in general, and I feel really good about the partnership there because they have a lot of views on that and how we can build this the best way together. Feel good about the MSR book and our ability Once again, we don't have to go buy MSRs, we originate them, which is something that we have at the highest level in the country, which will help us continue to grow going forward.

Let's see. I think there's some questions that are kind of Let me try to knock some more of these out.

Jeff Adelson, "As you build an in-house servicing platform, how are you balancing the strategic value of retaining MSRs and growing the servicing portfolio against the liquidity generated through MSR sales?" I think so I kind of answered that question I think a minute ago.

Trying to think if there's anything else I'd want to add to it to help answer your question. We we will continue to grow the MSR book.

We love what we've done. We will be the best servicer in America.

We won't might not be the biggest servicer in America, because we will opportunistically sell when it makes sense, but what we're doing for the consumers and the retention of those loans, giving them back to our broker channel, has been a huge, huge benefit. We've always done a very good job of it, but now that we're handling the servicing process and not outsourcing it to Cenlar or other lenders or other servicers, we feel we can do a better job, which will hopefully only drive the the refinance When the refinances come, a higher percentage come back to UWM.

As I've said before, although we don't have the biggest servicing book, we do, 12%, 13%, I think, of all refinances in the market, but we only have 2% or 3% of the servicing book. We don't have to own the servicing book to do the refinances.

The broker channel is very efficient, and we help our brokers succeed. With the technology and the infrastructure we provided for them to help them win, they will win in that market when the rates do drop for the refinances.

There's still a lot of refinances right now, but it's obviously in a higher-rate environment, and so in this example, our MSR book will continue to be stronger and continue to build going forward. Let's see.

Covered a lot of these questions. I'm trying to see if there's any other questions that I have not covered.

This is an Oaktree question kind of like I guess I kind of have said it already, let's just kind of repeat myself. Just to kind of reiterate, the question tied to Oaktree is, "Why is Oaktree the partner and and not, capital from other companies, or bringing another" And Oaktree is a strategic partner, right?

Capital is capital. Money is money.

If you get someone that can help you build your business and actually aligns with the vision and strategy that you have going forward, that's different type of capital. That's how we look at MSR as excuse me, Oaktree has strategic value, but they have MSR knowledge, they have there's some things you can do on the non-agency side, and they also have really strong leadership there, people that we're going to partner with that think of things in a way that maybe think a little differently and give us different perspectives on things.

I'm going to continue to run this business the best way for our brokers, for our team members, for our shareholders, and for Oaktree, and for UWM. Once again, I'm one of the shareholders as well, we're all doing it together, and we're all going to win together.

Once again, the other question kind of alludes to Oaktree, "Could you have gotten cheaper capital elsewhere?" I'm sure we could have gotten cheaper capital elsewhere.

Is that the right long-term benefit? I'm thinking about, the size, yeah, someone could put $100 million.

Someone put a billion and a half, and I put in 500 or 550 or committed up to $550 million. Those are big numbers.

I want Oaktree to make a lot of money. When Oaktree's warrants are in the money, everyone that's watching this call or that cares about UWM is going to be extremely happy for Oaktree, because they're going to make a lot of money as well.

We feel great about Oaktree, the partnership, but it's not just capital. They wrote a big check, they believed in housing, they believed in UWM, and they're making their bet with us right next to me, and I feel great about that opportunity.

I don't know, I feel like I've covered almost all these. I don't know if there's any other questions.

Here's what I'll say, is I'll I'll kind of wrap up, because I feel like a lot of questions are duplicative, and I want to make sure I cover everyone. If I did not cover your question, I'm personally happily get get on a call with people.

Of course, Investor Relations, Blake, Matt Roslin, my CFO Rami, everyone's available to talk. The Oaktree team is ready to talk.

We're happy to talk about it with anyone. We're excited about the opportunity.

The biggest thing is long-term winning. UWM is always about long term.

We're not looking back at a bad month or a bad quarter or a bad trade. That's not what UWM is about.

UWM has been in business 40 years, 40 years of helping brokers win, growing and continuing to put ourselves in position to dominate in all cycles. The last 5 years have been a downcycle, and UWM has consistently made what do you want to call it, $400, $500 million, but also I look at it $150 million to $200 million of adjusted EBITDA pretty consistently.

We are a strong operating business, and with the capital infusion and liquidity we have right now, the sky is the limit. I look at that from a perspective of how do we win long term together, and that's what UWM is about, and we are going to win with Oaktree next to us and all of our shareholders and partners, our brokers, our team members.

We're going to win together going forward, and that's my job: long-term domination. That's where UWM has never been better positioned than we are today.

Thanks for the time. Look forward to talking to anybody about it.

We appreciate the questions, the support, and you being on the call with us. Have a great day.