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
UWM Chairman, President, and CEO Mat Ishbia said the deal would have doubled UWM's servicing book and it created more risk, so the company set up a hedge as protection.
"Because of Two Harbors, we were over-hedged if you think of it that way," he told investors in an earnings call Thursday. "The market moved against us, and it's a onetime event that won't happen again."
The CEO said UWM's hedging policies are "much stronger now", and that it's not looking to acquire another company with a big MSR book, at least for now.
The company's board of directors also suspended UWM's quarterly dividend. Ishbia on Thursday was noncommittal on when the dividend would return, but floated both a regular and possible special dividend.
"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 well below industry norms now with the capital infusion, and run the business the most effective way," he said in a Zoom call.
Ishbia also lauded the Oaktree partnership, and the firm's knowledge of mortgage servicing rights and the industry at-large. The deal elevates the company's equity to around $3 billion, and helped to bring the company's soaring debt-to-equity ratio to around 1.2, in line with industry competitors, Ishbia said.
Investor analysts had previously flagged UWM's leverage ratio, and the company posted the non-GAAP, non-funding debt-to-equity ratio of 6.13 for the second quarter. That was 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.
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
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.
In a flash note Wednesday evening, analysts at Keefe, Bruyette & Woods anticipated weak shares on the "much larger than expected" capital need, and the company's $600 million reduction in equity.
UWM's stock, which closed at $1.79 per share Wednesday before the afternoon's earnings release, fell in afterhours trading and opened Thursday at $1.15 per share. As of noon Thursday, it was trading at $1.20 per share.
