Recording in progress. Mat Ishbia,

Chairman of UWM. Appreciate everyone joining the call.

Got a lot of questions from everybody, we will go through that process and answer them. Also, this time, I think some live questions will be handled at the end if you raise your hand and they'll open it up for you to ask a live question if I don't cover it prior to that.

With that being said, thank you for joining. Overall, we feel like third quarter was a great quarter for UWM.

The mortgage market, obviously, as you guys all understand, has a very tough backdrop for years now, 5-plus years. We feel great about where we're at at UWM from a business perspective, operating, and obviously from a cash and a capital perspective now, as well.

However, with all the great things going on, there's still a lot of headwinds in our industry, and we feel really good that we're not only prepared to handle them, but prepared to grow into them and do very well. Overall, the quarter was very good across the board.

$33.4 billion—I'm not going to go through and read all this stuff, you guys saw the release—$33.4 billion of volume, obviously very profitable this quarter. We expect to continue to win.

The big thing that I know people talk about is expenses. Our expenses were down substantially.

Those are really just tied to the investments we made in AI and technology over the last couple years when everyone thought our expenses were higher. We're starting to see the fruits of the labor or the benefits of that as we have gone through it.

We feel really good about the business. The operating business is very, very strong.

It always has been strong. Obviously, recently, the partnership with Oaktree is now substantiated our capital structure along with our liquidity.

We feel like we're in a really, really strong position to not only continue to win in this market, but be prepared for all markets, better or worse, going forward. We are ready for that.

We feel good about it. The one last comment is, I think that the mortgage market in the last five is showing a lot of warts on a lot of different companies, a lot of different things.

Everyone's got some issue, some hole. Our hole was solved with an opportunity with someone writing a check and with me and Oaktree partnering to do that, where a lot of other people's are operating holes, where they don't have enough business, they don't have enough opportunity to get loans, they can't keep up production, they can't invest in AI.

All of those things we feel really good. I don't like having any holes or any issues, but overall, we feel like if we're going to pick one potential issue, we were able to solve that, and now we're moving forward stronger than ever.

With that being said, there's so many questions, and so I'll try to answer a handful of them. I think a lot of them I can combine into the same question, because I think a lot of you asked the same question, maybe with different wording.

I'm going to try to read out the questions and go through this. Then once again, by the way, we added some people and done some different things.

Next quarter, we might look at a little different format. If you guys like something different, you don't like, please share with Blake Kolo and our team on what we can do better to make this format valuable to you guys next quarter and beyond.

We're looking at making some modifications, but we feel good about this, and I'm looking forward to answering all these questions. All right, let's jump into it.

First question I have here, Mikhail Goberman, Citizens; Jason Stewart, Janney; a bunch of you asked the same question. Why did UWM sell a significant amount of MSRs?

First off, and you're speaking of the fourth quarter. First off, I don't really look at it as that significant of an amount.

I think for the year of 2026, we end up selling $135, $140 billion-ish. I think in 2025, we sold $180 billion.

Actually sold less than our production will be this year. Not as significant, we just did a lot in the fourth quarter.

I do think it's a great opportunistic thing for UWM. I'm big on derisking, deleveraging.

It creates cash. It helps us in a lot of different respects, and so we're always looking at that opportunity.

We'll look at it again more this quarter or next quarter or whenever the opportunity is there. I do look at it, but the thing about UWM is we do so many loans that we can refill it really quickly.

I don't even look at that as that big of a pool of loans to sell. I know it is in the big scheme of things, but for us, we originate a lot of loans, and we'll be able to replenish that right back in, and then still be opportunistic to derisk and deleverage the company at all times.

That's kind of how I look at it on the MSR side for the fourth quarter. All right, second question, Ryan Nash, Goldman, how are you thinking about the trajectory of expense growth into the fourth quarter, and can you approach $2.1 billion of costs in 2027 versus $2.3 billion run rate in the third quarter?

My answer to that is yes, we can, and I expect us to do that. We manage expenses, and as I talked about before, it's very important that we utilize AI and utilize some of the investments we made in the past that are starting to show the benefits.

The expenses being down, whatever, it was 58, $58, $59 million quarter-over-quarter was obviously a great sign, and I expect that to continue, as in maintain this level. The only comment I'll make is some of those expenses can be variable.

If we double our business, which we still have the capacity of doing, everyone else is cutting expenses and they can't actually do more loans, but because of our AI investment, because of our scale and our size, we actually can do double the loans and still take advantage of that opportunity, whether it comes tomorrow, next year, or in three years, we're ready for it. We can handle that while still managing our expenses in a positive way.

I expect the $2.1 billion is a good target, and if we do a lot more loans and our interest expense goes up and our variable costs go up substantially, then I think we'll all be happy, because that means we've made a lot more money and did a lot of good things. Expenses are in a good spot, and I actually believe they were in a good spot prior.

However, the investments were just big. One other comment I'll make on these investments in AI is everyone's got to do it.

If I make a $35 million AI investment, well, that needs to be done to survive and win and thrive in 2027, '29, '31, '32, and beyond. We can do it and spread it over a lot of loans.

There aren't any other companies that can do it at that level. A couple others are close to our size that can do that, but the truth is most companies have to make the investment, and it's going to hammer them because of the cost.

We feel good about our expenses, we feel good about our investments, and we're going to continue going forward, and 2.1 is a good target. I think that's a fair estimate.

Whether we exactly hit it, plus or minus, we'll see, but I think the trend seems right. One last comment also, sorry, servicing expense is a big part of it, as well.

Bringing servicing in-house will help and will continue. This year, we kind of got double hit.

We had outsourced and insourced, and so we kind of had double hit, I think that we have opportunity to get lower. Thank you for the question.

Bose George, leverage, what leverage levels are you targeting? I guess what I'll say on leverage, I think being below 2 was an important metric for us.

I think we're 1.7, 1.8 right now, but I think below 2 was a good target, but what we're focusing on is trying to be around 1 and a half or less. I think that's the focus.

I think by the end of the year, actually, I think we'll be 1.2, 1.3, maybe even a little bit less, depending on interest rates and market and all these things. I expect us to be below 1.5 by the end of the year, and I think being in the 1 and a half to 2 range is a strong spot, and below 1 and a half is excellent, and I feel great about where we're at on that and focused on that.

Some of that ties to MSR stuff, as I've already mentioned, of deleveraging and derisking a little bit. Thank you for the question.

Mikhail Goberman, Citizens, how did UWM generate more than $10 billion of refinance volume? We're the best in the country at that, right?

We're the best origination machine in America. Our brokers are the best origination machine in America.

We dominate on the purchase side, but also on the refinance side, too. A lot of people have this myth that you have to own all the servicing to do the refinances.

Owning the servicing gives you a little better chance, but if you're the best in the country at what you do, brokers are great, we're great at it, we get a lot of business. I think the stat that someone showed me maybe a quarter ago, it was we own 2% of the servicing, but we do 13% of the refinances, which means we're very efficient and we can handle things from a positive way of getting these loans done fast and helping brokers and helping loan consumers take advantage of a refinance, whether it's cash-out or whatever it may be.

We feel good about it. We also have some products that people don't have, TRAC+, which is starting to drive some revenue, but more importantly, is cost savings to consumers.

Actually, the FHFA director and they just came out and are basically trying to mandate that people start using some of these title things that we've been doing for years. We've already had built off this infrastructure.

It's a revenue generator, it's a cost savings, and it's a competitive advantage for our brokers. That does help us on the refinance market, as well, whether it's a government or conventional loan.

We feel good about that. Refinance volume is very strong.

I focus on the purchase business, because refinance volume's going to go 4X when the opportunity comes. Right now, I focus on being consistent with purchases.

We're the best in the country at that. We will continue to focus on purchases.

Thank you for the question. Let's see.

Jason Stewart, Bose, I guess a bunch of you asked this question, so, are technology and AI savings sustainable? Yes, absolutely they're sustainable.

The investments we made to help us save money, it's helping our people do more, it's helping us move things around in a positive way to help us cut costs. It's not only sustainable, but I think it's the beginning of where we're going.

When I say that is cost savings is great, and of course we're focused on it, and you see the numbers and you see the results, it's not me talking about it, you can see it. Let's put that aside.

Also growth, opportunity. How much is AI going to help us do more loans?

Help our brokers win more business, help our brokers recruit more loan officers? How is AI going to transform the business?

Those are some of the investments we made that you haven't been able to see the benefits of. Some of them are coming out and we're doing a lot of business.

You've seen Mia, you've seen some stuff, we got the income calculator we built, and we've got some cool things. ChatUWM has been really powerful.

We have some really big AI initiatives that have really impacted the business, which also is helping with things like BrokerX and Success Track and training and growth. AI can definitely help you cut costs and expenses, and you're seeing some of that benefit, but you got to make a massive investment in it to do that.

Then you also got to see can it help you do more loans, help you grow your business, drive the top-line revenue, as well. We feel really good about that and the things we've done in the past, and we're continuing to do right now.

Thank you for the question on that, as well. Let's see.

Jeff Adelson, how are you responding to defend market share? In particular, Rocket announced 200 brokers representing 12 billion from your potential volume.

From your perspective, is holding market share a pricing So, first off, Rocket means zero to me. They just make numbers up.

None of that's true. Either way, they can say what they want to say.

They, if you remember back, they said all-in was a great thing for them. Obviously, we understand what's happened with that, because brokers are winning.

The nice part about this statement is Rocket's trying to do whatever they can to try to get involved. They're not getting any business.

They're not growing any broker market share. They're not going to, because all the brokers work with UWM, but more importantly, because they're not helping to partner with brokers and do things the right way.

I don't really talk about what Rocket does, but what I will say is what I do like about what Rocket is doing is they realize, along with everybody in this market realize, the brokers are the place to win. The brokers do the purchase business.

The brokers are the growing channel. The brokers are the winners right now.

They're going to continue to talk about I think they've been talking about for five, six years, if you go back to their stuff, they're going to take over the market share, do 25% of the broker channel, take 25% of the overall market. I guess people can say what they want to say.

UWM's market share is fantastic. We're strong, we're dominant, and we're growing, and we're going to continue to grow.

If we lose market share, I hope that happens, because that means the broker market has gotten so big and it's going to continue to grow. That's my focus.

My focus is growing the broker channel, helping every loan officer do a little bit more loans, helping every real estate agent that works with brokers do more business, help them all win. That's how we're going to win.

On the last note on that is, I just met with them personally. I think Rocket's fourth-biggest client, ninth-biggest client, all these people are moving over to work with UWM.

I think it's just kind of silliness to see those questions. Not the question's fine, but silliness to see Rocket saying what they're saying about things in general, because they're just trying to be in the broker channel, which is great, because the broker channel is growing and it will continue to grow, and we're going to continue to focus on it.

I'm going to do one more, and then let's just open it up to live questions, because I think I'm reading these questions and so many of them overlap. Let's do this one.

This one's Mikhail Goberman, Jeff Adelson, a couple other people saying, could you give an update on how the build-out of the in-house servicing platform is coming along? Let me answer that question for you.

We brought in 700,000 loans in-house at UWM, along with all the loans we do on a daily basis this year, which is amazing. With that being said, our expenses still went down, right?

We expect a huge value and benefit of optimization of this. So 2025, we made the announcement; 2026, we've brought them all in.

Most people can't bring 700,000 loans in in two years, let alone one year. We did all that.

Then 2026, I mean 2027, is going to be optimization, efficiencies. I think you'll see some of the cost savings there, but also the benefits for the brokers.

The benefits through our partnership with Bilt, but also just through the people wanting to stay here and refinance with UWM, because the servicing platform is just better than everyone else in the country. We feel really good about our servicing platform and the in-house structure we've done.

We've used AI and leveraged AI in ways that you can't do if you had a servicing book for 20 years, right? We brought it in-house in the AI time, if that makes sense, in order to able to use AI to keep our costs.

You'll see costs down, service levels up on the servicing book, and hopefully retention continues to be up. That's a win-win-win for our brokers, and for our investors, and for everyone around.

With that being said, let's see, do we have some questions? We have no questions right now.

I'm more than happy to take any live questions. If not, I can try to see if there's anything else in my papers to reach through.

If not, we can end it early, too. Is there a question coming?

It looks like there's a question coming in. Raise your hand once again if you have a question.

We'll try to call on you, and then we'll open it up for you. If you want to go ahead, Lee, and open it up?

It's open.

It's open? Bose George, okay.

Go ahead, Bose.

Hey Mat. I had a question on MSR hedging.

You guys have had a hedge on this quarter—

Good question. Hey,

can you hear me?

Can you

ask him to unmute?

Can you unmute, Bose?

No.

All right. I can't hear your question, Bose.

I'm sorry.

Let's try another caller.

If we can't get a question through—

Hi Matt, can you hear me?

Can you hear

the question? All right, well, someone read it out, say it out loud to me.

Sure. Matt, was hoping you could give us an update on the timing of the fourth quarter MSR sales, how much of those are completed—

Doug Harter or Bose George, who's going to speak? Doug, go ahead.

Great. Just update on the timing of when those sales are completed and how those sales compare to your current marks.

Update on the MSR sales, how they compare to current marks and when they'll be completed.

Yes. MSR sales, and how we look at that is in the current marks, we look at a lot of different things from a perspective of when we sell MSRs or whether we're not going to sell MSRs.

The current marks on our MSR book we feel are pretty good and strong. That doesn't mean that sometimes we'll make a little money, sometimes we'll lose a little bit of money on some of these deals.

We don't really focus on it too much as a concern, but what we do focus on is when we sell $40 billion of MSRs, for example, there's always going to be a liquidity discount there when we're doing such a big sale. We are going to look strategically at maybe making smaller sales in 2027, which opens up more buyers and continues to help us be closer to those marks, if that's the way you think about it, in a positive way.

Jeff Adelson next.

Jeff Adelson.

Hey, can you guys hear me okay? Thanks for taking my question.

Just maybe wanted to ask about the plans for the servicing book. I know in the past you've talked about getting that into the $400 billion range as you complete the in-house transition and hold more servicing, but just with the near-term sales, I know you talked about some smaller MSR sales next year, but just how do we think about the timeline to get to the 400 billion from here, and the strategic vision around the servicing book?

Thanks.

Plans for the servicing book, we've used the $400 billion number in the past, is that still a target of ours and how do we plan on getting to that, and is bringing servicing in-house going to shift our strategy?

Having servicing in-house does not shift our strategy about being opportunistic. As you said, we talked about $400 billion of MSRs at some point.

Us being able to originate as much as we can, I kind of put 400, and I think I might have even said 500, 400 to 500 as the max I'd ever want to have, which is basically two times our origination capabilities. We don't really look at it like the strategy's not shifted at all, if that's the question.

The strategy has not shifted, as in I feel really good about where we're at from a MSR servicing book perspective, also our servicing ability. Now, not having external sources, Cenlar and Mr.

Cooper, being involved with it at all, we have a lot more control of the process. We will continue to grow the servicing book, because we do a lot of loans, but if there's an opportunity to derisk, deleverage, and bring in a lot of cash, I think that's a positive, which then puts our debt holders, our equity holders, everyone in a better position across the board.

We will look at both those things. It has not shifted my strategy, as we've always been opportunistically growing, but at the same time, opportunistically selling, as well.

We can go back to Bose.

Bose. Hey Matt,

hopefully you can hear me now. You guys had an MSR, I guess a hedge on this quarter.

Just curious, going forward, is there a plan to have a hedge on the servicing or you kind of go back to what you used to do, which is just leave that asset unhedged?

MSR hedge strategy going forward, keep it on or take it off.

Good question. In general, I think you saw we hired a new Chief Investment Officer, Vandy Fartaj, who's done a great job.

His years of experience, 20-plus, he's excellent. He has a great perspective on it, and I have him kind of running that at the highest level now in conjunction with our CFO, Rami Hasani, and we're figuring all that stuff out.

The way we look at it is, in general, the best way to hedge is to do a lot more loans when refi rates drop. As long as you can stomach the MSR values going down because rates drop, knowing you're going to do a lot of business, we can do a lot of business when rates drop.

We don't look at hedging, we're definitely not 100% hedged, where before, as we had the issue, we were overhedged. We're now very strategic with it.

We have a great hedging policy and process. We partnered with our Oaktree partners on that, as well, and Vandy, and so we feel really good about the process and how we're hedging, and how much to hedge versus how much not to hedge.

We'll continue to make that evaluation on a quarterly basis. We met with the board yesterday about it, and about just things in general tied to hedging, capital, liquidity.

If you have less MSRs per the last sale, there's obviously less of a hedge that's needed. Obviously, if you could do a lot of loans when rates drop, you'll have an MSR write-down, if that's the right way, but you'll make $500 million in the quarter running the business.

It will all balance out. I think the natural hedge is the best way to do it, and we're not back to a natural hedge yet, however, we're very strategic with how we're handling it right now, and I feel great about the people making decisions.

Once again, we've hedged for years. If you actually look at it, there's been situations that we've hedged and certain opportunities that we've done that for years.

If you look at it since 2020 or 2021 when we've actually made money on the MSR book versus the hedge over the time. We just had one bad quarter where I think everyone wants to talk about, but if you look at over the last five years, we've actually were significantly hundreds and hundreds of millions plus when you look at our competitors, they would not be able to say that.

Once again, one one mistake tied to a lot of things that we've talked about, but we feel like we're in a really great position on the hedge and on just our MSR book in general.

We have Mikhail next.

All right, Mikhail Goberman.

Thanks, guys. Just a question on expectations for what you guys are seeing in terms of volumes and margins in the fourth quarter this far and expectations going into 2027.

Thanks.

Fourth quarter volume and margins, and expectations going into the next quarter and next year.

I think the mortgage market's got a lot of headwinds right now, I think people have to realize that. I also think, based on where we're at, we're in the best position to take advantage of it.

Take advantage of the opportunity from a rate perspective, take advantage of the opportunity like we talked about MSRs a bunch on this call, and then also from the AI and expense perspective. The volume numbers are definitely not going to be higher than they've been, right?

If you think about the market works right I think I looked at something that showed that the 10-year, this is the second-highest it's been in five, six years, and so it's definitely a tougher market in general. I think we're going to continue to sustain and do more business, and since we're mostly purchase, I'm not as concerned about the volume going down as much as a lot of refinance shops will.

I wouldn't project us doing 40, 50, $60 billion this quarter, I think it's definitely going to be different in the fourth quarter. The mortgage market's always, traditionally, fourth quarter, first quarter always the tougher times.

Once again, last comment is expenses are down, AI is winning, brokers are growing, we feel like we're in the best position of anybody to capitalize on the opportunity. Is there any other questions?

Ryan Nash.

Ryan Nash.

Hey, Matt. Just picking up on the back of what you just said, obviously, it's not a great environment for the mortgage market.

Assuming things don't change from a rate perspective, can you maybe just lay out a more cohesive plan on the Oaktree note repayment? Do you expect to be selling all MSR production, and how would you define success in your plan on managing it?

Thank you.

Thank you for the question. I would say, in general, on the Oaktree partnership is we understand the mortgage market's headwinds, as I told you already, are out there.

I think, as I mentioned at the very beginning, I think every mortgage lender out there of any size or relevance has some holes, right? Our hole we've been able to solve for with the capital of Oaktree and myself, and obviously, we're putting in more here now with the rights offering or myself again.

I feel like capital-wise, we're in a good spot. How and when do we pay it off?

Obviously, the plan is it's expensive money, and so how do we pay it off more efficiently rather than less efficiently? We're going to be using earnings as that opportunity.

As we made a couple hundred million dollars in adjusted EBITDA this quarter, and we'll continue to build our earnings, we'll be able to pay that down, make sure we're doing all the right things for our debt holders, our equity holders, and the mortgage brokers in our business. We feel good about that.

I don't have a concise plan, because obviously, I can't predict what the market's going to be and how much income, but it's definitely a priority of ours to take care of that preferred, and at the same time, to continue to deleverage and derisk the business so that we can not only capitalize when the opportunity comes with lower rates or a little bit better mortgage market, but dominate and grow and not only make a lot of money, but also help our brokers grow and make a lot of money and everyone succeed together. I feel like we're on a great trajectory going forward, but at the same time, I can't control interest rates, I can do everything I can do outside of that control and be prepared for rates going up, rates going down, paying off Oaktree right at two years and in a day, or, hey, does it take three years or four years, what's the process on that, and we're prepared for all those things, and we're excited about the partnership and what we're doing with it.

We're going to Jeff Adelson next.

All right, I think we got one more. Jeff Adelson is asking a question.

Go ahead.

Just to maybe follow up on the question on the near-term outlook for volumes. Just curious what you're seeing on gain-on-sale.

I think you're still near the higher end of that 115 to 130 range you've talked about. Is there an opportunity to stay at the higher end or even grow that from here?

Thank you.

Good question on gain-on-sale. I think we're consistent.

People don't use UWM because we have the lowest rates. The only way other competitors, if you see our competitors, wholesale margins, the only way they can compete is by having the lowest rate.

That's the only way they have a chance, and they still can't get the business, because they're not a great partner, they don't do all the things. For us, gain-on-sale, I think I expect it to be steady in the fourth quarter in the ranges that you described.

With that being said, I think other people will continue to try to buy the business, lower the rate as much as possible to try to get their nose in there and try to be competitive. The reality is if lowest rate was the only thing that won business in the wholesale channel, there'd be one winner, which is I think Provident Funding, who I don't think anyone really knows who they are, but they have the lowest rates.

That's not how it works, right? You have to have a better understanding of the overall business, not you, I'm saying our competitors, and so you have to understand that.

I feel like we're in a great, great position from a gain-on-sale perspective, a volume perspective, and whether our gain-on-sale is slightly higher or slightly lower than your range, but I definitely see it in that range. It's not going back to 60 or 70 like some of our competitors are at trying to win loans and stay afloat.

We have two more, we're going to take one from Maura Farley from Piper Sandler.

Sorry, there's two questions left. Maura,

Maura.

Thank you.

Hey, good morning. Thanks for taking the call.

Wondering if you could speak a little bit about the planned delevering with the proceeds from the MSR sale in 4Q and help us think about kind of what specific instruments United is maybe looking to pay down there, and how we should kind of think about cost of capital evolving.

Good question. Thank you for the question.

Understanding the capital we're bringing in, which is quite a bit of liquidity, how do we use that the best, right? Can we deleverage, whether it's our MSR lines, whether are we looking at maybe buying back some of the bonds, and buying back some of the bonds earlier than expected, or how can we utilize that cash to be the best, most optimal use?

Rami, our CFO, along with Vandy, who I had already mentioned earlier, are digging into it, what's the best use of those proceeds, and we're going to get the benefit of that. I'm expecting we talked about expenses, hopefully the interest expense will go down a little bit, because if we use that strategically, there's obviously multiple things we can do, whether it's to save money on the interest expense, whether you can't buy the Oaktree stuff back, so that's already locked in for two years, what's the next best use of capital?

That's how we're allocating it. With the one comment I'll say is cash is king, and so I will pay down stuff and we will do things, but having access to liquidity and the massive amount of cash that we have right now at UWM is a huge competitive advantage, especially in this market.

We're very conscientious, but we will use it to save some money on the interest expense and use it strategically.

Last question, Daniel Alvarez.

Daniel Alvarez, last question, thank you.

Yes, thank you for taking my call. I understand the warrant situation, but I'm wondering if you guys would consider buying back some common shares in the future to reduce the increased dilution.

Good question. It's definitely, back to the last question, it's definitely a benefit of extra cash.

Can we buy back those shares, the common shares? Is that an opportunity?

We've discussed that at the board level, and we always balance, and I know you guys know this because we've been doing this for years together, balancing the float versus the actual buying back shares, and how we do that. Everyone wants to get more float out, and then we potentially buy back when they're at such low prices, and there's always those opportunities.

We're looking at all things, I'll say that. The right way of thinking about it is we're looking at always to utilize the excess cash that we have coming in from the rights offering/preferred/junior preferred, from the MSR sales.

How do we use that capital and liquidity the best way to optimize our business? Some of those things are investments in AI, some of those things are paying down debt.

We're looking at all those things across the board, and definitely the one you brought up is definitely on the table as a discussion point. With that, hopefully the format was good.

Give us feedback how to make it better, which we're going to make some changes next quarter. The most important thing is I thank you for taking the time and your interest in UWM.

Hopefully you get some value and understand how our business is going. We feel great about where we're at and where we're going.

Like I said before, I think our business is in the best position possible in this market from a liquidity, capital perspective and a growth perspective with AI and the investments being made. Thank you for the time.

Look forward to talking to you guys all again next quarter. Have a great day.