UWM 2Q earnings limp after failed Two Harbors deal

United Wholesale Mortgage surprised the market Tuesday afternoon with its second quarter earnings featuring a hedge-related net loss and a major investment. 

The wholesale leader announced a $2.05 billion equity capital investment by Oaktree Capital Management and the Ishbia-family owned SFS Group Capital, a new investment vehicle. That will be used, among other corporate purposes, to pay down existing debt and repay mortgage servicing rights financing facilities, UWM said. 

The move follows UWM's failed bid to acquire Two Harbors Investment, which is on the verge of being acquired by CrossCountry Mortgage. That ordeal contributed to a $451.9 million net loss in the second quarter, which the company in an email said was driven primarily by a "unique hedge-related event" tied to an anticipated Two Harbors deal. UWM described it as a quarter-specific mark-to-market impact. 

The company's board of directors also suspended UWM's quarterly dividend. Analysts had anticipated the move following an assessment of the company's leverage in the wake of its Two Harbors bid.  

Chairman, President and CEO Mat Ishbia is scheduled to speak to investors tomorrow morning, after the company had planned to reveal its earnings before the market opened. In a statement Tuesday, he lauded the Oaktree partnership. 

"We're taking decisive action to make UWM stronger, more liquid and better positioned to win for years to come," he said. "This is not just about capital. This is about bringing in a strategic partner that understands our business, understands MSRs, understands the mortgage industry and believes in the same long-term vision we have for UWM."

Originations decline

For the second quarter, UWM reported $39.7 billion in loan origination volume, composed of $23.8 billion in purchase loans and $15.9 billion in refinance volume. 

The total originations mark was an 11% decline from the first quarter but just a 1% dip from the same quarter a year ago. The lender reported a stronger gain-on-sale margin from prior periods, at 1.33% compared to 1.23% and 1.13% in the quarter- and year-ago periods, respectively. 

The company's total revenue of $888 million for the second quarter was slightly down from the first quarter's $901.4 million, but greater than the $758.7 million in revenue in the second quarter of 2025. 

Including the mark-to-market impact, the net loss was a reversal of a $170.3 million profit in the last quarter and a $314.5 million profit a year ago. On an adjusted basis, the lender posted a net loss of $366.7 million for the recent second quarter. 

Where UWM stands

The company's servicing book grew from quarter- and year-ago periods to $247.6 billion in unpaid principal balance as of June 30. It also retains $5.3 billion in mortgage servicing rights, and $498 million in cash and cash equivalents, a figure which rebounded to a tick higher than its level a year ago. 

UWM also posted a non-GAAP, non-funding debt-to-equity ratio of 6.13, nearly double the mark of 3.18 to close the first quarter and far greater than a 1.90 number in the second quarter last year. Investor analysts last month highlighted UWM's leverage ratio which far exceeded its peers.

UWM's stock, which has declined significantly this year, closed Tuesday at $1.84 per share, and began to dip in after-hours trading.