Despite having lower margins for the third quarter, United Wholesale Mortgage (UWM) Chairman, President and CEO Mat Ishbia stated that he feels prepared to handle “headwinds in the industry” during the company’s third quarter earnings call.
On the call, Ishbia referenced the challenges the mortgage market has faced within the past five years, saying that the market is “showing a lot of warts on a lot of different companies.”
“Everyone’s got some issue,” he stated. “A lot of other people 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 and they can’t invest in AI.”
Interest rates have weighed on the housing market heavily as of late, leaving mortgage lenders with lower demand. For UWM’s earnings however, Ishbia attributes the company’s success to the recent Oaktree partnership, which came together after an ugly bidding war with CrossCountry Mortgage.
“The best way to hedge is to do a lot more loans when rates drop, as long as you can stomach the Mortgage Servicing Right (MSR) values going down because rates drop,” Ishbia added. “We have a great hedging policy and process. We partnered with Oaktree on that and Vandy Fartaj. We feel really good about the process of how we’re hedging and how much to hedge, versus how much not to hedge.”
The latest Federal Reserve meeting in October concluded with no changes to rates, but mortgage rates have slowly begun to inch downward to the lower 7% range—around 7.24% according to Freddie Mac—after spiking dramatically from the September meeting’s rate hike.
“I think the natural hedge is the best way to do it, and we’re not back to the natural hedge yet,” he said.
By the books
Although the quarter’s loan origination volume came in at $33.4 billion—down from Q2 which was $39.7 billion, and the first quarter at $44.9 billion—Ishbia mentioned that expenses were down substantially, specifically tied into investments with AI technology.
“Those (expenses) are really just tied to the investments we’ve made in AI and technology over the last couple years when everyone thought our expenses were higher,” he noted. “And so we’re starting to see the fruits of our labor.”
In total, Q3 revenue clocked in around $811.1 million, which is down from last quarter’s $888 million and slightly down from last year’s revenue of around $843 million.
Adjusted EBITDA came in at $178.3 million, less than last quarter and last year’s estimates ($185.9 million and $211.1 million, respectively).
UWM’s stock grew following the earnings call, as the earnings report beat out expectations. The company’s stock jumped nearly 13%, but is still down about 59% year to date.
Net loss was down quarterly in Q3, to $212.6 million compared to Q2 at $451.9 million. It was significantly higher than last year’s Q3 net loss however ($12.1 million). As an improvement from the previous quarter, Ishbia again credits the lower expenses to the company’s AI investments now panning out.
“AI can definitely help you cut costs and expenses, and you’re seeing some of that benefit, but you have to make a massive investment in it to do that. As you can see, it helps you do more loans, grow your business and drive the top line revenue,” he commented.
As for market share, Ishbia emphasizes the power and role brokers play in UWM’s success. He described brokers as the “growing channel” and states that they are the “winners right now.”
“UWM’s market share is fantastic. We’re strong, we’re dominant, 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 keep growing, that’s my focus,” he continued. “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, and helping them all win.”
With 2026 winding down, Ishbia sees the upcoming year as a time of “optimization” but said he expected the mortgage market to remain tough for some time. He also notes that UWM focuses primarily on purchase mortgages, and acknowledges the challenges that refinance mortgage loans could face with current rates.
“Since we’re mostly purchase, I’m not as concerned about the volume going down as much as a lot of refinance shops will,” he concluded. “Traditionally, the fourth quarter and first quarter are always the tougher times in the mortgage market. But once again, expenses are down, AI is winning and brokers are growing. We feel like we’re in the best position of anybody to capitalize on opportunity.”
