UWM Holdings (UWMC) Q3 2026 Earnings Call Transcript

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DATE

Wednesday, Nov. 4, 2026

CALL PARTICIPANTS

• Chairman, Chief Executive Officer and President - Mat Ishbia
• Chief Financial Officer - Rami Hasani
• Chief Investment Officer - Vandy Fartaj
• Investor Relations - Blake Kolo

TAKEAWAYS

• Loan Origination Volume -- $33.4 billion, reflecting a decrease from $39.7 billion in the second quarter of 2026.
• Purchase Originations -- $22.8 billion, representing 68.3% of total origination volume for the quarter.
• Refinance Volume -- $10.6 billion, driven by what management described as an efficient origination machine and competitive broker pricing.
• Net Income -- $212.6 million, compared to a net loss of $451.9 million in the prior quarter.
• Total Revenue -- $811.1 million, down from $888.0 million in the second quarter of 2026.
• Total Gain Margin -- 124 basis points, representing a decrease from 133 basis points in the preceding quarter.
• Adjusted EBITDA -- $178.3 million, reflecting lower production volumes compared to $185.9 million in the second quarter.
• Available Liquidity -- $1.35 billion, consisting of $394.8 million in unrestricted cash and available borrowing capacity.
• Mortgage Servicing Rights UPB -- $269.8 billion, with a weighted average interest rate of 5.97% as of Sept. 30, 2026.
• MSR Asset Value -- $6.5 billion, representing an increase from $5.3 billion as of June 30, 2026.
• MSR Sales -- $135 billion to $140 billion for the full year 2026, aimed at de-risking and deleveraging the balance sheet.
• Quarterly Expense Reduction -- $58 million to $59 million, driven by prior investments in technology and artificial intelligence.
• Full-Year Expense Target -- $2.1 billion for 2027, compared to a $2.3 billion run rate in the third quarter of 2026.
• Net Non-funding Debt to Equity Ratio -- 1.77, with management targeting a level below 1.5 by the end of the year.
• In-house Servicing Volume -- 700,000 loans, brought in-house over a multiyear period ending in 2026.
• Total Equity -- $1.3 billion, an increase from $1.0 billion at the end of the second quarter.
• Redeemable Preferred Stock -- $1.5 billion, reflecting capital proceeds from the Oaktree partnership.
• Gain on Sale Guidance -- 115 to 130 basis points, with management expecting margins to remain steady in the fourth quarter.
• VantageScore 4.0 Adoption -- 25% of borrowers, experiencing improved credit results and potentially lower costs.
• Warehouse Lines of Credit -- $7.7 billion, down from $8.6 billion at the end of the second quarter.

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RISKS

• Ishbia stated, "The mortgage market, obviously, as you guys all understand, has a very tough backdrop for years now," noting persistent industry headwinds.
• Ishbia warned that "the 10-year, this is like the second highest it's been in five, six years" and that "it's definitely a tougher market in general," which impact interest rates and volumes.
• Ishbia noted that "the mortgage market is showing a lot of warts on a lot of different companies, a lot of different things," indicating widespread operational challenges across the industry.

SUMMARY

UWM Holdings Corporation (NYSE:UWMC) reported a return to profitability in the third quarter despite high interest rates and a contraction in total origination volume. Management focused on a capital-strengthening strategy involving the sale of mortgage servicing rights and a strategic partnership with Oaktree to stabilize the balance sheet. The company is actively reducing its operating expenses through the implementation of artificial intelligence and the completion of its in-house servicing platform transition.

• Management indicated that the $2.1 billion expense target for 2027 relies on the realization of returns from multiyear investments in AI infrastructure. CEO Ishbia stated, "The expenses being down, whatever it was, $58 million, $59 million quarter-over-quarter was obviously a great sign, and I expect that to continue."
• The company completed the transfer of 700,000 loans to its in-house servicing platform, moving away from third-party sub-servicers Cenlar and Mr. Cooper.
• Management reported that the company currently captures 13% of refinances despite owning only 2% of total industry servicing, which Ishbia attributed to broker channel efficiency.
• The company is utilizing AI-driven tools like ChatUWM and an Income Calculator to reduce variable costs and increase the capacity of loan officers.
• CEO Ishbia indicated that the company would consider smaller mortgage servicing rights sales in 2027 to access a broader pool of buyers and achieve pricing closer to internal valuations.
• The Oaktree partnership provided capital that the company intends to pay down using earnings and excess cash from mortgage servicing rights sales over a two-year to four-year timeline.

INDUSTRY GLOSSARY

• MSR (Mortgage Servicing Rights): The contractual right to service a mortgage loan on behalf of an investor in exchange for a fee.
• Gain Margin: The profit earned on the production of a loan, typically expressed in basis points.
• UPB (Unpaid Principal Balance): The remaining amount of principal due on a loan or a portfolio of loans.
• WAC (Weighted Average Coupon): The average interest rate of a pool of mortgages, weighted by the principal balance of each loan.
• LLPA (Loan Level Price Adjustment): Risk-based pricing adjustments that affect the cost of a mortgage based on borrower characteristics.
• Basis Point: A unit of measure for interest rates and other percentages in finance, where one basis point equals 0.01%.
• TRAC+: A proprietary title review and closing product designed to reduce costs for consumers and increase speed for brokers.

Full Conference Call Transcript

Mat Ishbia: Appreciate everyone joining the call. We got a lot of questions from everybody, so we will go through that process and answer. Also, this time, I think some live questions will be handled at the end if you raise your hand, and they will open it up for you to ask a live question if I do not 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, five-plus years.

But we feel great about where we are 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 is still a lot of headwinds in our industry, and we feel really good that we are not only prepared to handle, but prepared to grow into them and do very well. Overall, the quarter was very good across the board. $33.4 billion of volume. Obviously very profitable this quarter, and we expect to continue to win. The big thing that I know people talk about is expenses.

Our expenses were down substantially, but those are really just tied to the investments we have made in AI and technology over the last couple years when everyone thought our expenses were higher. We are trying 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 has now substantiated our capital structure along with our liquidity, and we feel like we are 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 is showing a lot of warts on a lot of different companies, a lot of different things. Everyone has 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 move forward stronger than ever. With that being said, there's so many questions, and 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 people ask the same question maybe with different wording. I'm going to try to read out the questions and go through this. Once again, by the way, we added some people and done some different things. If there's a different 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, Jeff Adelson, a bunch of you asked the same question. Why did UWM sell a significant amount of MSRs? First off, speaking of the fourth quarter, first of all, I don't really look at it as that significant of amount. I think for the year of 2026, we ended up selling like $135 billion to $140 billion-ish, and 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. But I do think it's a great opportunistic thing for UWM. I'm big on de-risking, deleveraging. It creates cash. It helps us in a lot of different respects, and 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 de-risk 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 cost 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've made in the past that are starting to show the benefits. The expenses being down, whatever it was, $58 million, $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.

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. 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 made a lot more money and did a lot of good things.

But 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, that needs to be done to survive and win and thrive in 2027, 2029, 2031, 2032, 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 billion 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 that's the trend seems right. One last comment on those, though. Servicing expense is a big part of it as well. Bringing servicing in-house will help, and we'll continue this year. We kind of got double hit. We had it outsourced and insourced, and so we kind of hit 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 two is an important metric for us. But I think we're 1.7, 1.8 right now, but I think below two is a good target. But we're focusing on trying to be around the 1.5 or less. I think that's the focus. I think by the end of the year, actually, I think we'll be like 1.2, 1.3, maybe even a little bit less depending on interest rates and market and all these things.

But I expect this to be below 1.5 by the end of the year. I think being in the 1.5 to 2 range is a strong spot, and below 1.5 is excellent. I feel great about where we are at on that and focused on that. Some of that ties to MSR stuff, as I have already mentioned, about deleveraging and de-risking it a little bit. Thank you for the question. Mikhail Goberman, Citizens, "How did UWM generate more than $10 billion of refinance volume?" We are the best in the country at that, right? We are 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. Yeah, owning the servicing gives you a little better chance, but if you are the best in the country at what you do, brokers are great, we are great at it, we get a lot of business.

I think the stat that someone showed me, maybe a quarter ago, it was like, we own 2% of the servicing, but we do 13% of the refinances, which means we are 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 is cash out or whatever it may be. We feel good about it. We also have some products that people do not have. TRAC+, which is starting to drive some revenue, but more importantly is cost savings to consumers.

Actually, the FHFA director, they just came out and are basically trying to mandate that people start using some of these title things that we have been doing for years. We have already built out this infrastructure. It is a revenue generator, it is a cost savings, and it is a competitive advantage for our brokers. That does help us on the refinance market as well, whether it is a government or conventional loan. We feel good about that. Refinance volume is very strong. I focus on the purchase business, because refinance volume is going to go 4x when the opportunity comes. But right now, I focus on being consistent with purchases.

We are the best in the country at that. We will continue to focus on purchases. Thank you for the question. Let us see. Jason Stewart, Bose, I guess a bunch of you asked this question. "Are technology and AI savings sustainable?" Yes, absolutely they are sustainable. The investments we have made to help us save money, it is helping our people do more. It is helping us move things around in a positive way to help us cut costs. It is not only sustainable, but I think it is the beginning of where we are going.

When I say that is cost savings is great, and of course, we are focused on it, and you see those numbers and you see the results. Instead of me talking about it, you can see it. But let us 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? And those are some of the investments we've made that you don't see the benefits of it. Some of them are coming out, and we're doing a lot of business. You've seen Mia, you've seen some stuff.

We've got the Income Calculator we've 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 with 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 pricing?" 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. 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 that Rocket's trying to do whatever they can to try to get involved and be- They're not getting any business. They're not growing any broker market share, and 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 need to talk about what Rocket does, but what I will say is what I do like about what Rocket's 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 it. I think they're 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 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 wholesale 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, and 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, and so I think it's 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 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 brought them all in. Most people can't bring 700,000 loans in two years, let alone one year. We did all that. Then 2026, or actually 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? Being able to We brought it in-house in the AI times, if that makes sense, and we're 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 happy to take any live questions. If not, I can try to see if there's anything else in any of 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.

Speaker 0: Yeah, it's open.

Mat Ishbia: It's open?

Speaker 0: Yeah.

Mat Ishbia: Bose George. Okay, go ahead, Bose.

Bose George: Hey, Mat. Yeah, I had a question on MSR hedging. So you guys had hedges on this quarter.

Mat Ishbia: Yeah. Any question?

Bose George: Can you hear me?

Mat Ishbia: I don't-

Speaker 0: Maybe ask him to unmute.

Mat Ishbia: Can you unmute, Bose?

Speaker 0: Nope.

Mat Ishbia: All right. Well, I cannot hear your question, Bose. I am sorry.

Speaker 0: Let us try Doug Harter.

Mat Ishbia: Well, yeah. If we do not have any, if we cannot get a question through.

Doug Harter: Hi, Mat. Can you hear me?

Speaker 0: Can you hear him, Bose?

Mat Ishbia: Can you hear the question?

Speaker 0: Yeah.

Mat Ishbia: All right. Well, then why don't you Someone read it out, say it out loud to me.

Doug Harter: Sure. Mat, I was hoping you could give us an update on the timing of the fourth quarter MSR sales. How much of those are completed?

Mat Ishbia: Hi, Doug Harter or Bose George. Who is going to speak?

Doug Harter: It's Doug.

Mat Ishbia: Doug, go ahead.

Doug Harter: Great. Just an update on the timing of when those sales are completed and how those sales compared to your current marks.

Speaker 0: Update on the MSR sales, how they compared to current marks, and when they will be completed.

Mat Ishbia: Yeah. 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 are not going to sell MSRs. The current marks on our MSR book we feel are pretty good and strong. Now, does it mean that we are not going to Sometimes we will make a little money, sometimes we will lose a little bit of money on some of these deals. We do not really focus on it too much as a concern.

What we do focus on is, as our size, when we sell $40 billion in MSRs, for example, there is always going to be a liquidity discount there when we are 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 is the way you think about it, in a positive way.

Speaker 0: Jeff Adelson next.

Mat Ishbia: Jeff Adelson.

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 servicing platform transition and hold more servicing. But just with the near-term sale, I know you talked about some smaller MSR sales next year, but just how do we think about the timeline to getting to $400 billion from here, and the strategic vision around the servicing book? Thanks.

Speaker 0: 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 with bringing servicing in-house, does it shift our strategy?

Mat Ishbia: Yeah, 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 even have said 500, 400 to 500 as the max that everyone had, which is basically two times our origination capabilities. But we don't really look at it. The strategy's not shifted at all, if that's the question. The strategy has not shifted, and I feel really good about where we're at from a MSR servicing book perspective, also our servicing ability. And now not having external sources, with 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 de-risk, 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's not shifted my strategy, as we've always been opportunistically growing, but same time, opportunistically selling as well.

Speaker 0: We're going to go back to Bose.

Mat Ishbia: Bose?

Bose George: Hopefully you can hear me now. You guys had an MSR, I guess a hedge on this quarter. Just curious what, going forward, is there a plan to have the hedge on the servicing, or you kind of go back to what you used to do, which is just leave that asset unhedged?

Speaker 0: MSR hedge strategy going forward, keep it on or take it off?

Mat Ishbia: Yeah, so 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, I mean, he's excellent. He has a great perspective on it, and I have him 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 we've got 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 with rates drop, so we don't look at hedging. We're definitely not 100% hedged, where before, as we had the issue, we were over-hedged. We're now very strategic with it. We have a great hedging policy and process. We partner with our Oaktree partners on that as well, and Vandy. 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.

As 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 the 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 hedge, 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, the last hedge was We've hedged for years, and 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. If you look at over the last five years, we've actually, we're significantly hundreds and hundreds of millions plus, when if you look at our competitors, they would not be able to say that.

Once again, 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.

Speaker 0: We're going to go to Mikhail next.

Mat Ishbia: All right, Mikhail Goberman.

Mikhail Goberman: Yeah, thanks, guys. Just a question on expectations for what you guys are seeing in terms of volumes and margins in the fourth quarter thus far, and expectations going into 2027. Thanks.

Speaker 0: Fourth quarter expectations in addition to what you think going into the next year.

Mat Ishbia: Yeah, I think the mortgage market's got a lot of headwinds right now. I think that's 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 also from an AI and expense perspective. The volume numbers are definitely not going to be higher than they've been, right? If you think about the mortgage market. I think I looked at something that showed that the 10-year, this is like the second highest it's been in five, six years.

It's definitely a tougher market in general. But I think we're going to continue to sustain and do more business. Since we're mostly purchase, I'm not as concerned about the volume going down as much as a lot of refinance shops will. But it's not going to be I wouldn't project us doing $40 billion, $50 billion, $60 billion this quarter. I think it's definitely going to be different in the fourth quarter, and the mortgage market's always traditionally fourth quarter, first quarter, always the tougher times. But 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?

Speaker 0: Ryan Nash.

Mat Ishbia: Ryan Nash.

Ryan Nash: Hey, Mat. 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 selling all MSR production, and how would you define success in your plan on managing it? Thank you.

Mat Ishbia: Yeah. So, thank you for the question. I would say in general, on the Oaktree partnership is, we understand the mortgage market's headwinds, as I've 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 from 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 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 do not have a concise plan because obviously I cannot predict what the market is going to be and how much income, but it is definitely a priority of ours to take care of that preferred, and at the same time, to continue to deleverage and de-risk 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 are on a great trajectory going forward, but at the same time, I cannot 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 a day, or, hey, does it take three years or four years? What is the process on that? We are prepared for all those things, and we are excited about the partnership and what we are doing with it.

Speaker 0: Awesome. Go to Jeff Adelson next.

Mat Ishbia: All right. I think we got one more. Jeff Adelson is asking a question. Go ahead.

Jeff Adelson: Hey. Just to maybe follow up on the question on the near-term outlook for volumes. Just curious what you are seeing on gain on sale. I think you are still near the higher end of that 115 to 130 range you talked about. Is there an opportunity to stay at the higher end or even grow that from here? Thank you.

Mat Ishbia: Yeah. Good question on gain on sale. Yeah, I think we are consistent. People do not use UWM because we are 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 is the only way they have a chance, and they still cannot get the business because they are not a great partner. They do not 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 rates as much as possible to try to get their nose in there and try to be competitive. But the reality is, if lowest rate was the only thing that won business in the wholesale channel, there would be one winner, which is, I think, Provident Funding. I do not think anyone knows who they are, but they have the lowest rates. That is not how it works, right? You have to have a better understanding of the overall business, not you, I am saying our competitors. You have to understand that.

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

Speaker 0: Okay. We have two more. We are going to take one from Maura Farley and then BlackRock.

Mat Ishbia: Okay. Sorry, there's two questions left. Maura.

Speaker 0: Maura.

Mat Ishbia: Maura.

Speaker 0: Yeah.

Mat Ishbia: Thank you.

Maura Farley: Hey. Good morning. Thanks for taking the call. I'm 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 UWM is maybe looking to go down there, and how we should kind of think about cost of capital evolving.

Mat Ishbia: Yeah. So, 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 optimum use? Rami, our CFO, along with Vandy, who I already mentioned earlier, are digging into it and 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 can use that strategically, there are obviously multiple things we can do, whether it is to save money on the interest expense, whether we cannot buy the Oaktree stuff back, so that is already locked in for two years. What is the next best use of capital? That is how we are allocating it. But one comment I will say is, cash is king. 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 are very conscientious of it, but we will use it to save some money on interest expense and use it strategically.

Speaker 0: Thank you. Last question, Daniel Alvarez.

Mat Ishbia: Daniel Alvarez, last question. Thank you.

Daniel Alvarez: Yes. Thank you for taking my call. I understand the warrant situation, but I am wondering if you guys would consider buying back some common shares in the future to reduce the increased dilution.

Mat Ishbia: Yeah. Good question. It is definitely back to the last question. It is definitely a cost, benefit of extra cash. Can we buy back those shares, the common shares? Is that an opportunity? We have discussed that at the board level, and we always balance, and I know you guys know this because we have 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 will potentially buy back when they are at such low prices, and there are always those opportunities. We are looking at all things. I will say that.

The right way to think about it is, we are looking at all ways 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, some of those things. We are 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 on how to make it better, which we are going to make some changes next quarter.

But 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 are at and where we are 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 investments being made. Thank you for the time. Look forward to talking to you guys all again next quarter. Have a great day.

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