Q2 2024 UWM Holdings Corp Earnings Call

Abby: Ladies and gentlemen, good morning. My name is Abby and I will be your conference operator today. At this time, I would like to welcome everyone to the UWM Holdings Corporation second quarter 2024 earnings conference call.

Operator: And I will be your conference operator today.

Operator: Your conference operator today. At this time, I would like to welcome everyone to the UWM Holdings Corporation second quarter 2024 earnings conference call.

Operator: At this time, I would like to welcome everyone to the UWM Holdings Corporation's second quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise, and after the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press star, followed by the number one on your telephone keypad. If you would like to remove yourself from the queue, please repress Star 1. Thank you.

Operator: All lines have been placed on mute to prevent any background noise. And after the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number 1 on your telephone keypad. If you would like to remove yourself from the queue, please press star 2. Thank you. And Blake Kolo, you may begin your conference.

Abby: All lines have been placed on mute to prevent any background noise. And after the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number 1 on your telephone keypad.

Abby: If you would like to remove yourself from the queue, please repress star 1. Thank you. And Blake Kolo, you may begin your conference.

Blake Kolo: And Blake Kolo, you may begin your conference. Good morning. This is Blake Kolo, chief business officer and head of investor relations.

Blake Kolo: Good morning. This is Blake Kolo, Chief Business Officer and Head of Investor Relations. Thank you for joining us and welcome to the second quarter 2024 earnings call of UWM Holdings Corporation. Before we start, I would like to remind everyone that this conference call includes forward-looking statements. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to our earnings release that we issued this morning. Our commentary today will also include non-GAAP financial measures.

Abby: Good morning, this is Blake Kolo, Chief Business Officer and Head of Investor Relations.

Blake Kolo: Thank you for joining us and welcome to the second quarter, 2024 UWM Holdings Corporation's earnings call. Before we start, I would like to remind everyone that this conference call includes forward-looking statements. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to our earnings release as we issued this morning. Our commentary today will also include non-GAAP financial measures. For information on our non-gap metrics and the reconciliation is between the gap and non-gap metrics.

Speaker Change: Thank you for joining us and welcome to the second quarter 2024 UWM Holdings Corporation's earnings call. Before we start, I would like to remind everyone that this conference call includes forward-looking statements.

Speaker Change: For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to our earnings release that we issued this morning.

Speaker Change: Our commentary today will also include non-GAAP financial measures.

Speaker Change: For information on our non-GAAP metrics and the reconciliations between the GAAP and non-GAAP metrics for the reported results Please refer to the earnings release issued earlier today as well as our filings with the SEC

Blake Kolo: For information on our non-GAAP metrics and the reconciliations between the GAAP and non-GAAP metrics for the reported results, please refer to the earnings release issued earlier today, as well as our filings with the SEC. I will now turn the call over to Matt Ishbia, Chairman and CEO of UWM Holdings Corporation and United Wholesale Mortgages. Thanks, Blake.

Blake Kolo: For the reporter results, please refer to the earnings release issued earlier today, as well as under filings with the SEC.

Matt Ishbia: I will now turn the call over to Matt Ishbia, Chairman and CEO of UWM Holdings Corporation and United Wholesale Mortgage. Thanks, Blake, and thank you everyone for joining us today. For a while now, we've been saying 2024 will be a better year for the industry than 2023. And although it hasn't been that much better yet, our production at UWM has been winning. The market might be getting better soon, which we'll talk about a little bit later, but industry volume, the first year of 2024 versus 2023, is about the same. Most people are living in a purchase during market, but there's still tremendous upside lie that lies ahead.

Matt Ishbia: I will now turn the call over to Matt Ishbia, Chairman and CEO of UWM Holdings Corporation and United Wholesale Mortgage.

Matt Ishbia: Thanks Blake, and thank you everyone for joining us today. For a while now, we've been saying 2024 would be a better year for the industry than 2023. And although it hasn't been that much better yet, our production at UWM has been winning. The market might be getting better soon, which we'll talk about a little bit later, but industry value in the first half of 2024 versus 2023 is about the same. Most people are living in a purchase-driven market, but there's still tremendous upside that lies ahead. UWM has been winning.

Matt Ishbia: Thanks Blake and thank you everyone for joining us today. For a while now we've been saying 2024 would be a better year for the industry than 2023 and although it hasn't been that much better yet, our production at UWM has been winning.

Matt Ishbia: The market might be getting better soon, which we'll talk about a little bit later, but industry volume in the first half of 2024 versus 2023 is about the same. Most people are living in a purchase-driven market.

Matt Ishbia: UWM has been winning. We had an amazing quarter, which will go through the details, but the market might be getting better here soon. While racers stayed higher for longer, the broker channel continues to post share increases. As the latest data shows, the highest channel market share since 2008. So we continue to see the data on mortgage loan officers migrating from retail to wholesale. We're excited about that upside, and it's starting to happen. Now, there's tremendous buzz on our campus, as many of you saw at UWM Live. And those that were here saw first in our continued focus and investment in technology, which put UWM in the broker community in position to handle the significant increases in production that we anticipate when the bed cuts rate multiple times over the next 12 to 15 months.

Matt Ishbia: But there's still tremendous upside lies that lies ahead UWM has been winning. We had an amazing quarter, which we'll go through the details

Matt Ishbia: We had an amazing quarter, which we'll go through the details, but the market might be getting better here soon. While rates have stayed higher for longer, the broker channel continues to post share increases as the latest data shows the highest channel market share since 2008. And we continue to see data on mortgage loan officers migrating from retail to wholesale.

Matt Ishbia: but the market might be getting better here soon. While rates have stayed higher for longer, the broker channel continues to post.

Matt Ishbia: share increases. As the latest data shows, the highest channel market share since 2008. So we continue to see the data on mortgage loan officers.

Matt Ishbia: We're excited about that upside, and it's starting to happen. Now there's tremendous buzz on our campus, as many of you saw at UWM Live. And those that were here saw firsthand our continued focus and investment in technology, which put UWM and the broker community in position to handle the significant increases in production that we anticipate when the Fed cuts rates multiple times over the next 12 to 15 months. Now, let's look at the second quarter performance.

Matt Ishbia: migrating from retail to wholesale.

Speaker Change: We're excited about that upside and it's starting to happen. Now there's tremendous buzz on our campus.

Speaker Change: as many of you saw at UWM Live. And those that were here saw firsthand our continued focus and investment in technology which put UWM and the broker community in position to handle the significant increases in production that we anticipate when the Fed cuts rate multiple times over the next 12 to 15 months.

Matt Ishbia: Whether we compare year-over-year or sequentially, the second quarter was a great quarter. We closed $33.6 billion in total production within our guidance, with over $27 billion coming from purchases. Our production is up 6% from the second quarter of 2023 and, more impressive, up 22% compared to the first quarter of this year. In fact, it was our highest quarterly production since the first quarter of 2022. Our gain margin was 106 basis points at the higher end of the guidance, and we generated net income of over $76 million, which included a decline of $115 million on fair value MSRs, which is tied to interest rates and out of our control.

Matt Ishbia: Now, let's look at the second quarter performance. Whether we compare year over year or so, the second quarter was a great quarter. We closed 33.6 billion dollars in total production within our guidance, with over 27 billion coming from purchase. Our production is up 6% from the second quarter of 23 and more impressed at up 22% compared to the first quarter of this year. In fact, there's our highest quarterly production since the first quarter of 2022. Our gain margin was 166 basis points at the higher end of the guidance, and we generated net income of over 76 million, and that includes a decline of $115 million on fair value of MSRs, which is tied to interest rates and out of our control.

Speaker Change: Now, let's look at the second quarter performance.

Speaker Change: Whether we compare year over year or sequentially, the second quarter was a great quarter. We closed $33.6 billion in total production within our guidance with over $27 billion coming from purchase.

Speaker Change: Our production is up 6% from the second quarter of 2023 and more impressive, up 22% compared to the first quarter this year. In fact, it was our highest quarterly production since the first quarter of 2022.

Speaker Change: Our gain margin was 106 basis points at the higher end of the guidance and we generated net income of over $76 million and that includes a decline of $115 million on fair value MSRs which is tied to interest rates and out of our control.

Matt Ishbia: In the second quarter, we announced a number of products and technologies that add speed and capacity to Broker Channel that really just didn't exist in 2020 and 2021. We're really excited to see these things come into action. First, Mortgage Matchup, our consumer-facing website, is now the official mortgage partner of the MBA and WNBA, and we're seeing more and more people going to this website every single day.

Matt Ishbia: In the second quarter, we announced the number of products and technology at speed and capacity to broker channel that really just didn't exist in 2021. We're really excited to see these things come into action. First, Mortgage Matchup, our consumer-facing website, is now the official mortgage partner of the MBA and WMBA, and we're seeing more and more people going to this website every single day. Track Plus, which enables UWM to handle everything from the closing process from title, closing disbursement, so the broker no longer has to go outside and work in the third party title company or anyone outside, and it saves the consumer thousands of dollars many times.

Speaker Change: In the second quarter, we announced a number of products and technology that add speed and capacity to the broker channel that really just didn't exist in 2020 and 2021.

Speaker Change: We're really excited to see these things come into action. First, Mortgage Matchup, our consumer-facing website, is now the official mortgage partner of the NBA and WNBA, and we're seeing more and more people going to this website every single day.

Matt Ishbia: TrackPlus, which enables UWM to handle everything from the closing process, from title, closing, and disbursement, so the broker no longer has to go outside and work with a third-party title company or anyone outside, and it saves the consumer thousands of dollars many times. This is a huge game-changer, and we're taking advantage of it right now, and so are our brokers. We scaled PA+, which is Processor Assist Plus, allowing brokers and their processors to choose which part of the loan process that UWM Loan Coordinator will handle.

Speaker Change: Track Plus which enables UWM to handle everything from the closing process, from title, closing, disbursement so the broker no longer has to go outside and work with a third-party title company or anyone outside and it saves the consumer thousands of dollars many times. This is a huge game changer and we're taking advantage of it right now and so are our brokers.

Matt Ishbia: This is a huge game changer, and we're taking advantage of it right now, and so are brokers. We scale PA plus, which is processor assist plus a lot in brokers and their processors to choose which part of the loan prostate UWM loan coordinator handle. This is immediately asked capacity our brokers, which will become more critical as rates come down. Finally, we continue to have us heavily in our bull-undering system. This allows brokers to get initial approval in this little 15 minutes and also is allowing our funderers to do more business every single day with technology pulling the weight on a lot of the underwriting process.

Speaker Change: We scaled PA+, which is Processor Assist Plus, allowing brokers and their processors to choose which part of the loan process they let UWM Loan Coordinator handle. This immediately adds capacity to our brokers, which will become more critical as rates come down.

Matt Ishbia: This immediately adds capacity to our brokers, which will become more critical as rates come down. Finally, we continue to invest heavily in our BOLT underwriting system. This allows brokers to get initial approval in as little as 15 minutes and also is allowing our underwriters to do more business every single day with technology pulling the weight on a lot of the underwriting process. The full impact of these investments will be apparent when we enter a refined market where you will see UWM and the brokers able to add significantly more increase in volume than the rest of the market while still maintaining speed and the service we are known for.

Speaker Change: Finally, we continue to invest heavily in our Bolt underwriting system. This allows brokers to get initial approval in as little as 15 minutes and also is allowing our underwriters to do more business every single day with technology pulling the weight on a lot of the underwriting processes.

Matt Ishbia: Services. The full impact of these investments will be apparent when we enter a re-fin market where you will see UWM and the brokers able to add significantly more increase in volume than the rest of the market while still maintaining speed and the service we are known for. To put it bluntly, UWM and the broker community are thriving and are ready for when rates drop, and they will drop. You guys know me and know I'm excited about the business, and I'm excited as ever. But my 21 years of work is I never felt UWM is more prepared for the opportunity we are right now.

Speaker Change: The full impact of these investments will be apparent when we enter a refi market.

Speaker Change: where you will see UWM and the brokers able to add significantly more increase in volume than the rest of the market, while still maintaining speed and the service we are known for. To put it bluntly, UWM and the broker community are thriving and are ready for when rates drop, and they will drop.

Matt Ishbia: To put it bluntly, UWM and the broker community are thriving and are ready for when rates drop, and they will drop. You guys know me and know I'm excited about the business, and I'm excited as ever, but in my 21 years of work, I never felt UWM was more prepared for the opportunity we have right now. Andrew Hubacker and I have been building for this opportunity, and we're super excited. Now I'm going to turn things over to Andrew, our CFO, and then I'll come back and chat later.

Speaker Change: You guys know me and know I'm excited about the business and I'm excited as ever but my 21 years of workers I never felt UW is more prepared for the opportunity. We are right now We are prepared and we've been building for this opportunity and we're super excited Now I'm gonna turn things over to Andrew Hubacker our CFO and then I'll come back and chat later

Matt Ishbia: We are prepared and we've been building for this opportunity, and we're super excited.

Andrew Hubacker: Now I'm going to turn things over to Andrew Hubacker, our CFO, and then I'll come back and chat later. Thank you, Matt. We were pleased with our second quarter financial performance, reporting positive GAAP net income for the quarter and year to date. Importantly, we also remain profitable operationally and under the adjusted EBITDA basis before considering the net change and fair value of MSRs, which is largely outside of our control. Total production volume of 61.3 billion year-to-date is an approximate 13 percent increase from the first six months of 2023, and gain margin of 107 basis points is up from 90 basis points in the same period last year.

Andrew Hubacker: We were pleased with our second quarter financial performance, reporting positive gap net income for the quarter and year-to-date. Importantly, we also remained profitable operationally and on an adjusted EBITDA basis before considering the net change in fair value of MSRs, which is largely outside of our control.

Andrew Hubacker: We were pleased with our second quarter financial performance, reporting positive gap net income for the quarter and year-to-date. Importantly, we also remained profitable operationally and on an adjusted EBITDA basis, before considering the net change in fair value of MSRs, which is largely outside of our control.

Andrew Hubacker: Total production volume of 61.3 billion year-to-date is an approximate 13% increase from the first six months of 2023, and gain margin of 107 basis points is up from 90 basis points in the same period last year. These increases in volume and gain margin have allowed us to continue to invest significantly in our people, our technology, and in the growth of the broker channel while maintaining profitability. During the second quarter, we continued to execute on our consistent strategy of opportunistically selling MSRs, and we generated close to $2.4 billion in net proceeds from bulk and excess sales through the end of the second quarter.

Andrew Hubacker: These increases in volume and gain margin have allowed us to continue to invest significantly in our people, our technology, and in the growth of the broker channel while maintaining profitability. During the second quarter, we continued to execute on our consistent strategy of opportunistically selling MSRs, and we have generated close to 2.4 billion net proceeds from bulk and excess sales through the end of the second quarter. Proceeds from these sales have been used to de-lever our balance sheet, increase production, and invest in our business while also maintaining a consistent dividend for our shareholders. These sales have been targeted at our higher coupon MSRs and allowed us to significantly de-risk the portfolio.

Andrew Hubacker: Proceeds from these sales have been used to de-lever our balance sheet, increase production, and invest in our business, while also maintaining a consistent dividend for our shareholders. These sales have been targeted at our higher coupon MSRs and allowed us to significantly de-risk the portfolio. Most of our bulk and excess sales in the first six months of 2024 were of servicing rights on loans with coupons above 5.5%, and approximately one-third of our bulk sales were of Ginnie Mae collateral. The weighted average coupon of our portfolio declined from the end of 2023 to 4.31%, even with year-to-date new production at higher rates.

Andrew Hubacker: Most of our bulk and excess sales in the first six months of 2024 were of service to the end of the second quarter. We are increasing rights on loans with coupons above 5.5 percent, and approximately one third of our bulk sales were of genuine collateral. The weighted average coupon of our portfolio declined from the end of 2023 to 4.31 percent, even with your de-new production at higher rates. As at the end of the quarter, our capital and leverage ratios continue to fall with unexpected and targeted ranges in the current environment. We ended Q2 with total cash of just under 700 million and no outstanding borrowings on our MSR or unsecured line of credit, so liquidity and access to liquidity remain very strong.

Andrew Hubacker: As of the end of the quarter, our capital and leverage ratios continue to fall within expected and targeted ranges in the current environment. We ended Q2 with total cash of just under $700 million and no outstanding borrowings on our MSR or unsecured line of credit. So liquidity and access to liquidity remain very strong. We continue to be prepared, operationally and financially, for different market cycles. Okay, I'll now turn things back over to our Chairman, President, and CEO, Matt Ishbia, for some closing remarks. Thanks, Andrew.

Andrew Hubacker: As of the end of the quarter, our capital and leverage ratios continue to fall within expected and targeted ranges in the current environment.

Andrew Hubacker: We continue to be prepared operationally and financially for different market cycles.

Andrew Hubacker: We continue to be prepared, operationally and financially, for different market cycles.

Matt Ishbia: Okay, I'll turn things back over to our Chairman, President and CEO Mattis for some closing remarks. Thanks, Andrew. I'll close with a few points before the Q&A. You know, more and more American consumers are seeing the advantage of getting their mortgage through a mortgage broker channel. It's undeniably the fastest, easiest, and most affordable way to get a mortgage, and the latest share numbers validate this. As I said before in Q1, we saw the broker channel achieve the highest share of industry in the last 15 years. I would say that UWM and the broker community are in a much stronger position heading into the next re-fight market than we were in 2020.

Matt Ishbia: Thanks, Andrew. I'll close with a few points before the Q&A. You know, more and more American consumers are seeing the advantage of getting their mortgage through a mortgage broker. It's undeniably the fastest, easiest, and most affordable way to get a mortgage, and the latest share numbers validate this. As I said before, in Q1, we saw the Broker Channel achieve the highest share of the industry in the last 15 years. I would say that UWM and the broker community are in a much stronger position heading into the next refi market than we were in 2020.

Speaker Change: Thanks Andrew. I'll close with a few points before the Q&A. You know, more and more American consumers are seeing the advantage of getting their mortgage through Mortgage Broker Channel.

Matt Ishbia: But regardless of the market, we'll remain the best mortgage lender in America. Our focus will continue to be on providing elite service and technology to the mortgage brokers, so they continue to serve with Americans. and consumers. Having been the number one wholesale lender for a decade now, and number one overall lender for the last three years, as well as a top purchase lender in America, our focus turns to making the broker channel number one. To us, the broker channel is achieving over 50% market share that may take us three years, five years, or 20 years.

Matt Ishbia: But regardless of the market, we'll remain the best mortgage lender in America. Our focus will continue to be on providing elite service and technology to mortgage brokers so they can continue to serve the American consumer. Having been the number one wholesale lender for a decade now, and the number one overall lender for the last three years, as well as a top purchase lender in America, our focus now turns to making the broker channel number one.

Matt Ishbia: To us, the broker channel is achieving over 50% market share. That may take us three years, five years, or 20 years. But this is the target, and this is what we're going to focus on, because it's best for the consumers. It's best for mortgage brokers. And it's also best for UWM.

Matt Ishbia: But this is the target, and this is what we're going to focus on because it's best for the consumers, it's best for mortars brokers, it's also best for UWM. We're going to win as a team. Now turning to guidance, we expect Q3 production to be anywhere between $31 and $38 billion. And our game margin between $85 and 110 base points. With that being said, the last couple days of the market has really made an inflection point where we can look at, could the RIFI boom be here right now? Now, if the 10-year stays where it's at right now, and the mortgage industry stays where that right now, we will beat this guidance from a production perspective.

Matt Ishbia: We're going to win as a team. Now turning to guidance, we expect Q3 production to be anywhere between $31 and $38 billion. With that being said, the last couple of days of the market have really made an inflection point where we can look at, could the refi boom be here right now? Now, if the 10-year stays where it's at right now, and mortgage interest rates stay where they're at right now, we will beat this guidance from a production perspective.

Speaker Change: With that being said, the last couple days of the market has really made an inflection point where we can look at, could the refi boom be here right now? Now, if the 10-year stays where it's at right now, and mortgage interest rates stay where they're at right now, we will beat this guidance from a production perspective.

Matt Ishbia: But I'm more excited about the fourth quarter and beyond if the 10-year and rate stay where they're at. Obviously, rates to go back up five minutes after I talk on this call, and we'll be exactly what I got. I want to make sure you guys know 31 to 38 and 85 to 110 is in line, and we expect to be in those numbers. But there is a lot of upside ahead. The best part about the upside is this. We are the most prepared mortgage company in America. We've been building for this. We did not lay people off.

Matt Ishbia: But I'm more excited about the fourth quarter and beyond if the 10-year and rates stay where they're at. Obviously, rates could go back up five minutes after I talk on this call and will be exactly what I guided you. I want to make sure you guys know 31 to 38 and 85 to 110 are in line, and we expect to be in those numbers.

Speaker Change: But, I'm more excited about the fourth quarter and beyond if the tenure and rates stay where they're at. Obviously, rates could go back up five minutes after I talk on this call and will be exactly what I guided you. I want to make sure you guys know 31 to 38 and 85 to 110 is in line and we expect to be in those numbers.

Matt Ishbia: But there is a lot of upside ahead. The best part about the upside is this: We are the most prepared mortgage company in America. We've been building for this. We did not lay people off. We have been prepared for the opportunity. I always said that in a mini refi boom or a full refi boom, the first six months is when you make all the money.

Matt Ishbia: We have been prepared for the opportunity. Now we said the mini refi boom or a full refi boom, the first six months when you make all the money. And if that's what we're about to hit, we are in the best position ever at UWM. And I'm proud to share that with shareholders and excited about the future. And if the market turns back, we're still going to dominate in the purchase market we have been for the last couple of years. So we're excited about what's ahead. We'll see what happens. I'm really excited to see the third quarter, fourth quarter, and the upside and possibilities ahead with UWM.

Matt Ishbia: And if that's what we're about to hit, we are in the best position ever at UWM, and I'm proud to share that with the shareholders and excited about the future. And if the market turns back, we're still gonna dominate the purchase market as we have for the last couple of years. So we're excited about what's ahead. We'll see what happens. I'm really excited to see the third quarter, the fourth quarter, and the upside and the possibilities ahead with UWM. Now at this time, I'll turn it over to the Q and A, and we'll go through it there.

Speaker Change: We are in the best position ever at UWM, and I'm proud to share that with the shareholders and excited about the future. And if the market turns back...

Speaker Change: We're still going to dominate in the purchase market we have been for the last couple years. So, we're excited about what's ahead. We'll see what happens. I'm really excited to see the third quarter, fourth quarter, and the upside and the possibilities ahead with UWM. Now, at this time, I'll turn it over to the Q&A, and we'll go through there.

Operator: Now, at this time, I'll turn it over to the Q&A, and we'll go through there. And thank you. At this time, I would like to remind everyone that in order to ask a question, press star and then the number one on your telephone you add. If at any time you would like to remove yourself from the Q, please repress star one. And at this time, we will pause momentarily to assemble our roster. We will now begin the Q&A session, and your first question comes from the line of Bose George with KBW.

Operator: And thank you. At this time, I would like to remind everyone, in order to ask a question, press the star and then the number 1 on your telephone keypad. If at any time you would like to remove yourself from the queue, please press star 1. And at this time, we will pause momentarily to assemble our roster. We will now begin the Q&A session, and your first question comes from the line of Bose George with KBW. Your line is open.

Bose George: Your line is open.

Bose George: Hey, good morning. Actually, in terms of rate expectations and the market, if the Fed does cut by a couple of hundred basis points as the forward curve is suggesting, but the yield curve steepens, and the 10-year doesn't go down that much, do you think we could see a pickup in arms production, and that sort of contributes to overall volume increases?

Matt Ishbia: Hey, good morning. Actually, in terms of rate expectations on the market, the Fed does cut by a couple of hundred basis points as a forward curve is suggesting, but the yield curve steepens and say the 10 year doesn't go down that much. Do you think we could see a pickup in arm production and that helps that sort of contributes to overall volume increases? Yeah. Well, thanks for the question. Obviously, it's hard to predict all the opportunities and possibilities out there. A Fed cutting rate as much as you described would be a massive movement in the markets in general.

Speaker Change: Hey good morning. Actually, in terms of rate expectations and the market, if the Fed does cut by a couple of hundred basis points as a forward curve is suggesting,

Matt Ishbia: Yeah. Well, thanks for the question.

Speaker Change: Yeah, thanks for the question. Obviously, it's hard to predict all the opportunities and possibilities out there. The Fed cutting rates as much as you just described would be a massive movement in the markets in general. I'd have a hard time thinking the 10-year would not follow in some impactful way. I also understand the difference between...

Matt Ishbia: Obviously, it's hard to predict all the opportunities and possibilities out there. The Fed cutting rates, as much as you just described, would be a massive movement in the markets in general. I'd have a hard time thinking the 10-year would not follow in some impactful way. Also understand the difference between how much the 10-year versus the 30-year fix. Could arms become more relevant? Yes.

Matt Ishbia: I'd have a hard time thinking the 10 year would not follow in some impactful way. Also understand the difference between how much the 10 year versus 30 year fix could arms become more relevant. Yes, I still believe 30-year fix will be the prevailing product for the foreseeable future. But the Fed cutting rates, even 25 basis points, which everyone in the market expects September or 17, 18, whatever, will move the markets from a perspective of consumer demand, consumer awareness. It's the best marketing piece in the world right there. When the Fed cuts rate, every news station and every consumer will call their mortgage broker, and we think that will be more impactful than even the rate movement down.

Matt Ishbia: I still believe 30-year fix will be the prevailing product for the foreseeable future. But the Fed cutting rates, even 25 basis points, which everyone in the market expects on September 17th, 18th, whatever, will move the markets from a perspective of consumer demand and consumer awareness. It's the best marketing piece in the world right there.

Speaker Change: you know, how much the 10-year versus the 30-year fix. Could arms become more relevant? Yes.

Speaker Change: I still believe 30-year fix will be the prevailing product for the foreseeable future, but the Fed cutting rates, even 25 basis points, which everyone in the market expects September 17th to 18th, whatever.

Matt Ishbia: When the Fed cuts rates, it will lead every news station, and every consumer will call their mortgage broker. And we think that will be more impactful than even the rate movement down. So we'll see how that all shakes out and what the impact will be. But we're on the cusp. We're not quite there yet, but we're on the cusp of a potentially very interesting time here that we are very, very well prepared for and that we've been waiting for here at UWM.

Matt Ishbia: So we'll see how that all shakes out and what the impact will be. But we're on the we're on the cusp. We're not quite there yet. We're on the cusp of a potential very interesting time here that we are very, very well prepared for and we've been waiting for here at UWF.

Bose George: Okay, great. Thanks. And then, actually, on the TrackPlus program, like, how much do borrowers save from that? And then, like, in terms of how you guys essentially sort of work with title insurers to sort of, you know, I guess reinsure that, or how does that structure of that program work?

Bose George: Well, okay, great thanks. And then actually on the Track Plus program, like how much do borrowers save from that?

Speaker Change: Okay, great, thanks. And then actually on the TrackPlus program, like how much do borrowers save from that? And then like in terms of how you, you know, do you guys essentially sort of work with title insurers to sort of, you know, I guess reinsure that or how does that structure of that program work?

Matt Ishbia: And then, like in terms of how you, you know, do you guys essentially sort of work with title insurers to sort of, you know, I guess, reinsure that? Or how does that structure that program work? Yeah, well there's a bunch of different nuances in parts to it. But the key is the consumer saves thousand or thousands with an asset end on on many transactions, if not all transactions through Track Plus. It's a, it's a really simple easy way to close your loan. We're trying to make the process faster, easier, and cheaper. It does all three.

Matt Ishbia: Yeah, well, there's a bunch of different nuances and parts to it, but the key is the consumer saves thousands or thousands with an S at the end on many transactions, if not all transactions through TrackPlus. It's a really simple, easy way to close your loan. We're trying to make the process faster, easier, and cheaper. It does all three.

Speaker Change: Yeah, well, there's a bunch of different nuances and parts to it. But the key is the consumer saves thousand or thousands with an S at the end on on on many transactions, if not all transactions through TrackPlus. It's a it's a really simple, easy way to close your loan. We're trying to make the process faster, easier and cheaper. It does all three. There's all different nuances.

Matt Ishbia: There's all different nuances with how we handle the risk. But from a perspective, if we look at it as we're taking on little to zero risk at all in our organization. And we're saving consumers a lot of money, and it's disrupting the title world. And it's going to, and it's going to happen to get us better for consumers. We're always what's better for consumers.

Bose George: There are all different nuances with how we handle the risk, but from a perspective, we look at it as we're taking on little to zero risk at all in our organization, and we're saving consumers a lot of money, and it's disrupting the title world, and it's going to happen because it's better for consumers. We're always doing what's better for consumers, and I'm sure you've read about FH That's going to be better for consumers. What's better for consumers wins, and that's why we're winning because brokers are better for consumers. It doesn't happen overnight, but it's all happening, and this title's another example of Okay, great.

Speaker Change: with how we handle the risk but from a perspective we look at it as we're taking on little to zero risk.

Matt Ishbia: Okay, great. Thank you.

Speaker Change: at all in our organization, and we're saving consumers a lot of money, and it's disrupting the title world. And it's going to happen because it's better for consumers. We're always what's better for consumers. I'm sure you read about FHFA's title pilot. That's going to be better for consumers. What's better for consumers wins, and that's why we're winning because brokers are better for consumers. It doesn't happen overnight, but it's all happening, and title is another example of that.

Matt Ishbia: And I'm sure you read about FHFA Title Pilot. That's going to be better for consumers. Like what's better for consumers wins, and that's why we're winning because brokers are better for consumers. It doesn't happen overnight, but it's all happening. And titles another example of that.

Bose George: Okay, great. Thank you.

Speaker Change: Okay, great. Thank you.

Derek Summers: And your next question comes from the line of Derek Summers with Jeffries. Your line is open. Thank you.

Derek Summers: And your next question comes from the line of Derek Summers with Jeffreys. Your line is open.

Speaker Change: Thank you.

Speaker Change: and your next question comes from the line of Derrick Summers with Jeffries. Your line is open.

Derek Summers: Hey, good morning everyone. To follow on from TRAC, TRAC+, and PA+, could you provide any kind of incremental color on maybe adoption rates by your broker partners or any other color on how those products are trending?

Derek Summers: Good morning, everyone. To follow on to kind of track track plus and PA plus. Could you provide any kind of incremental color on maybe adoption rates by your broker partners or any other color on how those products are trending? Yeah, thanks for the question. So a couple things. The adoption rates actually have gone up significantly in the last two, three months. What's happening is, they're really just built for scale. What there's two parts of the equation back in 2021. When we find hit brokers lost market share, they didn't gain as much because one, we were well prepared.

Derrick Summers: Hey, good morning everyone. To follow on to kind of Track Plus and PA Plus, could you provide any kind of incremental color on maybe adoption rates by your broker partners or any other color on how those products are trending?

Matt Ishbia: Yeah, thanks for the question. So, a couple things.

Matt Ishbia: The adoption rates actually have gone up significantly in the last two, three months. What's happening is they're really just built for scale. There are two parts to the equation.

Speaker Change: Yeah, thanks for the question. So a couple of things. Adoption rates actually have gone up significantly in the last two, three months. What's happening is they're really just built for scale. There's two parts of the equation. Back in 2020 and 21, when refis hit, brokers lost market share. They didn't gain as much, because one, we were well-prepared. I would say.

Matt Ishbia: Back in 2020 and 21, when refis hit, brokers lost market share. But they didn't gain as much because one, we were well prepared. I'll say pretty well prepared, not as good as we are today, but they were not. What we've built with PA Plus and Track Plus is we're taking the guesswork out of it. The brokers don't have to hire up. The title companies don't have to hire up.

Matt Ishbia: I would say pretty well prepared. Not as good as we are today, but brokers were not what we built with PA Plus and Track Plus. We're taking the guesswork out of it. The brokers don't have to hire up. The title companies don't have to hire up. Nobody has to hire up because UWM's technology and innovation and that we've hired up and are prepared is able to handle the scale. Number, it's not just UWM handling scale because if brokers can't triple the business or double the business, how am I going to do that? How am I going to grow at a significant level if they can't?

Speaker Change: We're pretty well prepared, not as good as we are today, but brokers we're not. What we've built with PA Plus and Track Plus is we're taking the guesswork out of it. The brokers don't have to hire up.

Matt Ishbia: Nobody has to hire because UWM's technology and innovation and the people we've hired and are prepared are able to handle the scale. Remember, it's not just UWM handling the scale because if brokers can't triple their business or double their business, how am I going to do that, right? How am I going to grow at a significant level if they can't?

Speaker Change: The title copies don't have to hire up.

Speaker Change: Nobody has to hire up because UWM's technology and innovation and that we've hired up and are prepared is able to handle the scale. Remember, it's not just UWM handling the scale because if brokers can't triple the business or double the business, how am I going to do that?

Matt Ishbia: And so PA Plus and Track Plus are basically taking the guesswork out of the game and saying, we've got the scale for everybody, brokers and UWM included, and Track Plus and PA Plus. So the adoption has been pretty great, but it's not going to be at the levels that we expect because right now they don't need a scale because the market doesn't route warranty right now. Right now, the market is still where the market was, where we're going through and experiencing the same numbers we've been seeing.

Matt Ishbia: And so PA Plus, Track Plus is basically taking the guesswork out of the game and saying, we've got the scale for everybody brokers and UWM included and Track Plus and PA Plus. So the adoption has been pretty great, but it's not going to be at the levels that we expect because right now they don't need a scale because the market doesn't route warrant it right now. Right now the market is still where the market was, where we're going through and going through the same numbers we've been seeing. So it's not creating; it's not a huge scale right now, but it does remove a lot of bottlenecks in the industry and in the broker's world.

Speaker Change: right? How am I going to grow at a significant level if they can't? And so PA+, TRAC+, is basically taking the guesswork out of the game and saying, we've got the scale for everybody, brokers and UWM included, and TRAC+, and PA+. So the adoption has been pretty great, but it's not going to be at the levels that we expect, because right now they don't need a scale, because the market doesn't route warranty right now. Right now the market is still where the market was, where we're going

Matt Ishbia: So it's not creating, it's not a huge scale right now, but it does remove a lot of bottlenecks in the industry, in the broker world, and it makes it so it's faster, easier, and cheaper, and the word is scale. We're prepared for scale, not only for UWM, but for our brokers, and PA Plus and Track Plus do that.

Speaker Change: creating it's not a huge scale right now but it does remove a lot of bottlenecks in the industry in the brokers world and it makes it so it's faster easier and cheaper and the word is scale we're prepared for scale for not only for UWM but for our brokers and PA plus and track plus does that

Matt Ishbia: And it makes it so it's faster, easier, and cheaper. And the word is Scale. We're prepared for scale for not only for UWM, but for our brokers and PA Plus and Track Plus does that.

Derek Summers: Thank you. Helpful commentary there.

Derek Summers: Thank you. Helpful commentary there. And then, just to circle back to your commentary on guidance, is there a 30-year mortgage rate in mind where the floodgates really open on a refi rally, or how are you thinking about that?

Derek Summers: And then just a circle back to your commentary on guidance. Is there a 30-year mortgage rate in mind where you know the floodgates really open on a refi rally, or how are you thinking about it? Yeah, I think it's, I don't know if I have the exact number to give you, but what I would say is, you know, the market we're at now, if it takes, if the 10 year takes down a little bit more from where it is today, like the range we're in right now is good, but we're on the cost, right? So I can't give an exact number, but I do think that if the 10 year drops, you know, down below the 375 range, and we start getting in those ranges lower than that, it will spur a refinance boom.

Speaker Change: Thank you, helpful commentary there. And then just to circle back to your commentary on guidance, is there a 30-year mortgage rate in mind where you know the floodgates really open on a refi rally or how are you thinking about that?

Matt Ishbia: Yeah, I mean, I don't know if I have an exact number to give you, but what I would say is, you know, the market where we're at now, if it ticks, if the 10-year ticks down a little bit more from where it is today, like the range we're in right now is good, but we're on the cusp, right? So I can't give an exact number, but I do think that if the 10-year drops, you know, you know, down below the 375 range and we start getting in those ranges lower than that, it will spur a refinance boom. And so we're not there yet.

Speaker Change: I don't know if I have an exact number to give you, but what I would say is, you know, the market where we're at now, if it ticks, if the 10-year ticks down a little bit more from where it is today, like the range we're in right now is good.

Speaker Change: But we're on the cusp, right? So I can't give an exact number, but I do think that if the tenure drops...

Speaker Change: down below the 375 range and we start getting in those ranges lower than that, it will spur

Matt Ishbia: And so we're not there yet, and you know, like I said after I talk on this, in 10 minutes, and it already has gone up a little bit today, that, you know, everything is exactly what I guided just 31 to 38, but there is a lot of upside, and what I'll tell you is, we're the most prepared company for that upside. And so if the rate drops more substantially and revise become relevant, you know, we could do a substantial amount of more business, and when I say substantial, I mean like significantly, significantly more on a monthly basis, not for this quarter, most likely, because this quarter is already almost baked. If you think about it, we're midway through August almost, but for the fourth quarter, it could be exorbitantly higher numbers and with a rate drop a little bit further.

Derek Summers: And, you know, like I said, after I talked about this for 10 minutes, and it already has gone up a little bit today, that, you know, everything is exactly what I guided you, 31 to 38, but there is a lot of upside. And what I'll tell you is we're the most prepared company for that upside. And so if the rates drop more substantially and refis become relevant, you know, we could do a substantial amount of more business.

Speaker Change: refinance boom and so we're not there yet and you know like I said after I talk on this

Speaker Change: in 10 minutes, and it already has gone up a little bit today, that...

Speaker Change: Everything is exactly what I guided you, 31 to 38, but there is a lot of upside. And what I'll tell you is we're the most prepared company for that upside. And so if the rates drop more substantially and refis become relevant, we could do a substantial amount of more business. And when I say substantial, I mean like...

Derek Summers: And when I say substantial, I mean like significantly, significantly more on a monthly basis. Not for this quarter, most likely, because this quarter is already almost baked if you think about it. We're almost midway through August, but for the fourth quarter, it could be exorbitantly higher numbers and with a rate drop a little bit further.

Speaker Change: significantly significantly more on a monthly basis not for this quarter most likely because this quarters already almost baked if you think about it We're midway through August almost but for the fourth quarter. It could be exorbitantly higher numbers and With a rate drop of a little bit further

Derek Summers: Great, thank you. That's all from me.

Matt Ishbia: Great. Thank you. That's all for me.

Doug Harder: Thank you. And your next question comes from the line of Doug Harder with UBS. Your line is open. Thanks. Can you just talk a little bit more about some of the investments you made this quarter, and how you think about the incremental scale and volume, and you know, kind of how your expensive. This would look in a kind of in a significantly up volume environment. Yeah, no, thanks for the question. So my expenses look very similar in a very, you know, we built this in like we didn't lay people off. We've been building. We've been preparing.

Speaker Change: Great, thank you. That's all for me.

Doug Harter: And your next question comes from the line of Doug Harter with UBS. Your line is open.

Speaker Change: Thank you.

Speaker Change: And your next question comes from the line of Doug Harder with UBS. Your line is open.

Doug Harter: Thanks. Matt, can you just talk a little bit more about some of the investments you made this quarter and how you think about the incremental scale and volume and, you know, kind of how your expenses would look in a, you know, kind of a significantly higher volume environment?

Speaker Change: Thanks.

Doug Harder: Matt, can you just talk a little bit more about some of the investments you made this quarter and how you think about the incremental scale and volume and, you know, kind of how your expenses would look in a, you know, kind of in a significantly up volume environment?

Matt Ishbia: Yeah, no, thanks for the question. So my expenses look very similar in a very, you know, we built this in, like we didn't lay people off. We've been building, we've been preparing. I have about 8,000 people. I don't know the exact number, but roughly 8,000 people at our company right now.

Doug Harder: very similar in a very

Speaker Change: We built this in. We didn't lay people off. We've been building. We've been preparing. I have about 8,000 people. I don't know the exact number, but roughly 8,000 people at our company right now. We are prepared. We built some amazing technology, which I don't even want to speak to on this because you'll see it when you see it. But we got some amazing things that we built and are ready for scale. That's why I've been talking about we are the most prepared. We've obviously been dominating for the last two and a half years. Every quarter, I come out and tell you what we're going to hit, we hit it.

Matt Ishbia: I have about 8,000 people. I don't know exact number, but roughly 8,000 people at our company right now. You know, we are prepared.

Matt Ishbia: You know, we are prepared. We built some amazing technology, which I don't even want to speak to about here because it's just, you'll see it when you see it, but we got some amazing things that we built and are ready for scale. And that's why I've been talking about how we are the most prepared. We've obviously been dominant for the last two and a half years. Every quarter, I come on and tell you what we're gonna hit. We hit it.

Matt Ishbia: We built some amazing technology, which I don't even want to speak to on this because it's just you'll see it when you see it. But we got some amazing things that we built and are ready for scale. And that's why I've been talking about like we are the most prepared. We've obviously been dominating for the last two and a half years every quarter. I come on, tell you what we're going to hit. We hit it. We've been outperforming every other mortgage coming to America, and it's not even close. And we are the most prepared mortgage.

Matt Ishbia: We've been outperforming every other mortgage company in America, and it's not even close. And we are the most prepared mortgage company. Now, does that mean we're gonna do the most volume of anyone when refis come? There are a lot of refi-only shots out there, right?

Speaker Change: We've been outperforming every other mortgage company in America and it's not even close.

Matt Ishbia: Now, let me do the most volume of everyone when we five come. There's not a refi-only shots out there, right? But we are extremely prepared. We are not going to miss a beat. Like the amount of volume that we got in today or yesterday versus what we've been getting in before is significantly higher. And we can maintain that and manage that and handle that. And so I guess my perspective is that the technology, the investment in people, in training, in all aspects of a technology innovation process has been significant. And it's not just been the last three months I've been doing it.

Speaker Change: and we are the most prepared mortgage company. Now, does that mean we're gonna do the most volume of everyone when refis come? There's a lot of refi only shops out there, right? But we are extremely prepared. We are not gonna miss a beat. Like the amount of volume that we got in today or yesterday versus what we've been getting in before is significantly higher and we can maintain that and manage that and handle that. And so I guess my perspective is the technology, the investment in people, in training.

Matt Ishbia: But we are extremely prepared. We are not gonna miss a beat. Like the amount of volume that we got in today or yesterday versus what we've been getting in before is significantly higher, and we can maintain that and manage that and handle that. And so I guess my perspective is the technology, the investment in people, in training, in all aspects of the technological innovation process has been significant. And it's not just been the last three months that I've been doing it.

Speaker Change: in all aspects of a technology innovation process has been significant. And it's not just been the last three months I've been doing it. We've been doing it for the last two and a half years, waiting for the day. I'm not saying we're at the day, but we're getting close to that day, when that day comes, which we all know is going to come.

Matt Ishbia: We've been doing it in the last two and a half years, waiting for the day. And like I said, we're, I'm not saying we're at the day, but we're getting close to that day when that day comes, which we all know is going to come. The best mortgage company in the country is going to thrive. And we're excited about that. And the brokers are going to thrive. And we're excited about that. And our shareholders will get that benefit. I appreciate the insights.

Matt Ishbia: We've been doing it for the last two and a half years, waiting for the day. And like I said, I'm not saying we're at the day, but we're getting close to that day. And when that day comes, which we all know is gonna come, the best mortgage company in the country is gonna thrive, and we're excited about that. And the brokers are gonna thrive, and we're excited about that. And our shareholders will get that benefit.

Doug Harter: I appreciate the insights, Matt. Thank you.

Speaker Change: The best mortgage company in the country is going to thrive, and we're excited about that. And the brokers are going to thrive, and we're excited about that. And our shareholders will get that benefit.

Speaker Change: I appreciate the insights, Matt. Thank you.

Brad Capuzzi: And your next question comes from the line of Brad Capuzzi with Piper Sandler. Your line is open. Thank you.

Matt Ishbia: And your next question comes from the line of Brad Kapoozy with Piper Sandler. Your line is. Open. Thank you for taking the question. Just following up on Track Plus, can you discuss a timeline or plan to extend this beyond online refighted transactions? Sit, sit it again. On Track Plus, like I know you mentioned that UWM live that right now it's the capabilities for it or just online refighted transactions. They're like a timeline or plan to extend that out beyond just refighted transactions. Yeah, so there's two parts. Track and Track Plus. Track allows for purchases. Track Plus is just refinance transactions right now.

Matt Ishbia: Thank you.

Speaker Change: And your next question comes from the line of Brad Capuzzi with Piper Sandler. Your line is open.

Brad Capuzzi: Thank you for taking the question. Just following up on TrackPlus, can you discuss a timeline or plan to extend this beyond online refi transactions? Say that again.

Brad Capuzzi: Thank you for taking the question. Just following up on TrackPlus, can you discuss a timeline or plan to extend this beyond online refi transactions?

Brad Capuzzi: On Track Plus, like I know you mentioned on UWM Live that right now the capabilities for it are, you know, just online refi transactions. Is there like a timeline or plan to extend that out beyond just refi transactions? Yeah, so there's

Speaker Change: Say that again?

Brad Capuzzi: On TrackPlus, I know you mentioned at UWM Live that right now the capabilities for it are, you know, just online refi transactions. Is there like a timeline or plan to extend that out beyond just refi transactions?

Matt Ishbia: What TRAC+, along with PA+, along with a lot of things, are built for is the market doubling in a week's notice, right? So think about, like, can the title companies handle double the volume? Can a broker handle double the volume? Can UWM handle double the volume?

Matt Ishbia: Yeah, so there's two parts. There's TRAC and TRAC+. TRAC allows for purchases. TRAC+ is just refinance transactions right now. Once again, you know, we can handle the purchase business. Title companies can handle the purchase business. Brokers have been able to handle the purchase business. We all understand that market.

Speaker Change: Yeah, so there's two parts. There's Track and Track Plus. Track allows for purchases. Track Plus is just refinance transactions right now.

Bradley Capuzzi: Once again, you know, we can handle the purchase business. Title companies can have the purchase; business brokers have been allowed first business. We all understand that market. What Track Plus, along with PA Plus, along with a lot of things our built for, is the market doubling in a week's notice, right? So think about like, can the title companies handle double the volume? Can I broker handle double the volume? Can UWM handle double the volume? Well, answer the UWM question: yes, we can.

Speaker Change: Once again, we can handle the purchase business, title companies can handle the purchase business, brokers have been able to handle the purchase business. We all understand that market. What Track Plus, along with PA Plus, along with a lot of things are built for is

Speaker Change: the market doubling in a week's notice, right? So think about like...

Matt Ishbia: Well, the answer to the UWM question is yes, we can. The answer to the broker question is yes, they can because of PA+. And the answer to the title company question is, I have no idea.

Speaker Change: Can the title companies handle double the volume? Can a broker handle double the volume? Can UWM handle double the volume? Well, the answer to the UWM question is yes, we can. The answer to the broker question is yes, they can because of PA+. And the answer to the title company question is I have no idea, I don't really care because UWM can handle it with TRAC+.

Matt Ishbia: Answer the broker question: yes, they can because of PA Plus, and answer the title company question: I have no idea. I don't really care because UWM can handle with Track Plus. So we're taking into our own hands to handle double the volume in a one-day notice, right? And so Track Plus is built for that. And so it's online refinances, virtual closings; it's making the process faster, easier, cheaper for consumers. I have not built, although I have the ability to build it. I'm focused on scale. And so we have not focused on, hey, can we advance it to in-person refinances or in-person purchases, although we can do some of that with Track.

Matt Ishbia: I don't really care because UWM can handle it with TRAC+. So we're taking it into our own hands to handle double the volume in a one-day notice, right? And so TRAC+ is built for that. And so it's online refinances, virtual closings. It's making the process faster, easier, cheaper for consumers. I have not built it, although I have the ability to build it. I'm focused

Speaker Change: focused on, hey, can we advance it to in-person refinances or in-person purchases, although we can do some of that with track.

Matt Ishbia: And so we have not focused on, hey, can we advance it to in-person refinances or in-person purchases, although we can do some of that with TRAC. But my big focus is, what am I going to do if the tenure or the rates drop overnight? And like I said, it almost happened Thursday or Friday. We're getting close, and we're prepared for it. And that's what TRAC+ is built for. And the adoption, back to the earlier question, the adoption has been, I won't give a number, but substantially higher in the last three weeks or four weeks than it was two months ago. Because it's starting, people are starting to feel it. And what I've been pushing people on is, are you an early adopter? You'd better try this stuff and understand how TRAC+ and PA+ all work.

Matt Ishbia: But my big focus is, what am I going to do if the 10 year or the rates drop overnight? And like I said, it almost happened Thursday, Friday. We're getting close, and we're prepared for it. And that's what Track Plus is built for. And so, and the adoption back to the earlier question, the adoption has been. I won't give, I won't give a number, but substantially higher in the last three weeks or four weeks than it was two months ago, because it's starting, people are starting to feel, and what we, I've been pushing people is, are you an early adopter?

Matt Ishbia: You better try this stuff and understand how Track Plus and PA Plus all this works. So when the rates do drop and that opportunity comes, you know, can you double your business? You don't have to worry about it because UWM's got your back, and we will see that happen. And so we're very well prepared, and we're excited about it.

Brad Capuzzi: So when the rates do drop and that opportunity comes, you know, can you double your business? You don't have to worry about it because UWM has got your back, and we will make that happen. And so we're very well prepared, and we're excited about it.

Bradley Capuzzi: Thanks. And then do you still have an update on the dynamics playing out within the broker channel? You know, have you seen pricing be more rational, and you still seeing continue pull back from peers in that channel?

Matt Ishbia: And then, can you just give an update on the dynamics playing out within the Barker channel? You know, have you seen pricing be more rational, and are you still seeing continued pullback from peers in that channel? Thanks.

Speaker Change: Thanks, and then can you just give an update on the dynamics playing out within the broker channel? You know, have you seen pricing be more rational and you still seeing continued pullback from peers in that channel? Thanks.

Matt Ishbia: Thanks. Yeah, I mean, I think pricing has been rational for a while. I feel like I'm not concerned about wholesale. Like the truth is, all parts of the market, if the rates drop a little bit further than they are today, right? Everyone's going to get busy. And then what happens in rational pricing is maybe you're describing or pricing in general will change because people will start, you know, a lot of our competitors bring in 75 to 100 loans a day. That's how small they are. We're much bigger than all of them. Then going to 200 loans in a double their business.

Matt Ishbia: Yeah, I mean, I think pricing has been rational for a while. I feel like I'm not concerned about wholesale.

Matt Ishbia: The truth is, all parts of the market, if the rates drop a little bit further than they are today, right, everyone's going to get busy. And then what happens to rational pricing, as maybe you're describing, or pricing in general will change, because people will start, you know, a lot of our competitors bring in 75 to 100 loans a day. That's how small they are, right? We're much bigger than all of them. I don't know if they will.

Speaker Change: And then what happens in rational pricing, as maybe you're describing, or pricing in general will change. Because a lot of our competitors bring in 75 to 100 loans a day. That's how small they are, right? We're much bigger than all of them. Then going to 200 loans a day, can they double their business?

Matt Ishbia: I don't know if they can. And so what happens is they back up pricing. And so that will happen. But that's not just wholesale. That's retail. That's the whole industry. People that are not prepared. And that's why we want to be prepared. So we don't have to do that. Our pricing, our margins. I feel really good about where our margins are. I feel really good about our volumes. We're very, very profitable as a stamp today. Now the one thing to recognize when rates do drop in all these things, you say, rational pricing, but MSR values are going to plummet, right?

Matt Ishbia: And so what happens is they back off prices. And so that will happen, but it's not just wholesale, that's retail, that's the whole industry. People that are not prepared, and that's why we want to be prepared, so we don't have to do that.

Speaker Change: I don't know if they can and so what happens is they back off pricing and so that will happen But it's not just wholesale that's retail That's the whole industry people that are not prepared and that's why we want to be prepared So we don't have to do that our pricing our margins. I feel really good about where our margins are I feel really good about our volumes We're very very profitable as it stands today now the one thing to recognize when rates do drop and all these things you say rational Pricing but MSR values are going to plummet right so all these companies have huge MSRs and hopefully you've realized Andrew Blake our team of people here did an amazing job with our MSRs if anyone caught that our whack

Matt Ishbia: Our pricing, our margins, I feel really good about where our margins are. I feel really good about our volumes. We're very, very profitable as it stands today. Now, the one thing to recognize is when rates do drop and all these things, and you say rational pricing, but MSR values are gonna plummet, right? So all these companies that have huge MSRs, and hopefully you've realized, Andrew, Blake, our team of people here did an amazing job with our MSRs. If anyone noticed that our WAC is lower now than it was at the end of the first quarter, after we just did $33 billion in rates around the 7% range. Imagine that, right?

Matt Ishbia: So all these companies have huge MSRs, and hopefully you realize Andrew Blake, our team of people here did an amazing job with our MSRs. If anyone caught that our whack is lower now than it was at the end of the first quarter, after we just did $33 billion of rates around the 7% range. Imagine that, right? And so we've de-risked significantly. So we'll still have an MSR right down. But we'll have an origination right up, if you think of it that way, doing a lot of business. Everyone's going to have an MSR right down. So balancing those things, understanding what's happening, is important going forward.

Andrew Blake: is lower now than it was at the end of the first quarter after we just did $33 billion of rates around the 7% range. Imagine that, right? And so we've de-risked significantly. So we'll still have an MSR write-down.

Matt Ishbia: And so we've de-risked significantly. So we'll still have an MSR write-down, but we'll have an origination write-up, if you think about it that way. We do a lot of business. Everyone's gonna have an MSR write-down. So balancing those things, and understanding what's happening is important.

Brad Capuzzi: But I think that it'll be interesting to see 10 people hand up. So pricing rationale, like margins, will go up. They don't go down in a refi boom; they go up. How much they'll go up, I'll hopefully be able to guide you to next quarter if the rates drop a little bit further than they are. Right now, I feel good about our range because we're still off. We're off the lows, which I was at a couple quarters ago, 75 to 100.

Matt Ishbia: But I think that it'll be interesting to see 10 people handle. So pricing rational, like margins will go up. They don't go down and re-five rooms. They go up how much they'll go up. I'll hopefully be able to guide to next quarter if the rates drop a little bit further than they are. Right now, I feel good about our range because that we're still off or off the lows, which I was a couple of quarters ago, 75 to 100. We're 85 to 110. And we're going to be in that range this quarter. Now the question is, if rates drop further, I expect margins to go up.

Brad Capuzzi: We're between 85 and 110, and we're gonna be in that range this quarter. Now the question is, if rates drop further, I expect margins to go up, and I'll guide that for the next quarter if that happens.

Speaker Change: We're 85 to 110, and we're going to be in that range this quarter. Now the question is, if rates drop further, I expect margins to go up, and I'll guide that for the next quarter if that happens.

Matt Ishbia: And I'll guide that for the next quarter, if that happens.

Eric Hagen: Thanks for taking my questions.

Matt Ishbia: Thanks for taking my questions. Thank you.

Speaker Change: Thanks for taking my questions.

Eric Hagen: And your next question comes from the line of Eric Hagen with BTIG. Your line is open. Hey, thanks. Good morning. Hope you guys are well.

Eric Hagen: And your next question comes from the line of Eric Hagen with BTIG. Your line is open.

Speaker Change: Thank you.

Speaker Change: and your next question comes from the line of Eric Hagen with BTIG. Your line is open.

Eric Hagen: Hey, thanks. Good morning. Hope you guys are well. Following up on that point, I mean, how stable do you feel like margins are if rates are lower? Like, even within the refi and purchase channels specifically, what do you feel maybe accounts for differences in margin between those two channels if rates are lower?

Eric Hagen: Hey, following up on that point, I mean, how stable do you feel like margins are? Rates are lower, like even within the RIFI and purchase channels specifically. What do you feel like maybe accounts for differences in margins between those two channels if rates are lower? Capacity is just capacity. That's what the constant difference is. People can't handle it. So what's going to happen is rates are, if rates do go lower, right now 85 to 110. It's all day. It's simple. It's easy. It's clean. I feel really good about hitting those numbers 31 to 38 billion.

Eric Hagen: Hey, thanks. Good morning. Hope you guys are well. Hey, following up on that point, I mean, how stable do you feel like margins are if rates are lower? Like, even within the refi and purchase channels specifically, what do you feel like maybe accounts for differences in margin between those two channels if rates are lower?

Matt Ishbia: Capacity. It's just capacity. That's what accounts for differences. People can't handle it.

Eric Hagen: Capacity.

Matt Ishbia: So what's going to happen is rates are, if rates do go lower, right now, 85 to 110, it's all day. It's simple. It's easy. It's clean.

Speaker Change: It's just capacity. That's what accounts for the difference. People can't handle it. So what's going to happen is if rates do go lower, right now, 85 to 110, it's all day. It's simple, it's easy, it's clean. I feel really good about hitting those numbers, 31 to 38 billion.

Matt Ishbia: I feel really good about hitting those numbers. 31 to 38 billion. Now, if rates drop, like I said, let's just make up a number. I'm not, 350 on the 10 year, okay? Three and a half, right?

Matt Ishbia: Now, if rates drop, like I said, let's just make up a number. I'm not 350 on the 10 year. Okay, three and a half. Right. If it goes there, all bets are off. Right. It could literally, you know, we could double our business. Right. And the. The. Now if rates drop and we in margins could go from the 100 range, so the 130 range, like it could go those numbers. I don't want you to quote those numbers. Let me give you ranges that, if the 10 year goes down substantially, that's not that's going to happen to everybody.

Speaker Change: Now, if rates drop, like I said, let's just make up a number, 350 on the 10-year, okay? Three and a half. Right?

Matt Ishbia: If it goes there... all bets are off, right? It could literally, you know, we could double our business, right? And margins could go from the 100 range to the 130 range. Like, it could go to those numbers. But I don't want you to quote those numbers.

Speaker Change: All bets are off, right? It could literally, you know, we could double our business, right? And the...

Speaker Change: And now, if rates drop and margins can go from the 100 range to the 130 range, it could go to those numbers. I don't want you to quote those numbers. I'm just giving you ranges that if the 10-year goes down substantially, that's going to happen to everybody. Everyone's going to get flooded with refinances because there's trillions of dollars of loans

Matt Ishbia: I'm just giving you ranges that if the 10-year goes down substantially, that's going to happen to everybody. Everyone's going to get flooded with refinances because there are trillions of dollars of loans in the 7%, 6.5% to 8% ranges. And so if all of a sudden the 30-year fix is 5.5%, 5.75%, man, people are going to refinance. And when the Fed lowers rates, people are going to think about refinancing. They're going to start calling and reaching out and going to mortgagematchup.com, and going to independent mortgage brokers. That's going to happen. And so MSR write-downs will be massive, origination volumes, and gain on sale will go up. And so how does that balance out? You can determine how you want it.

Matt Ishbia: Everyone's going to get flooded with refinances because there's trillions of dollars alone in the seven percent, six and a half to eight percent ranges. And so all of a sudden, 30 or fixes, five and a half, five, seven, five. Man, people are going to refinance. And when the Fed lowers rates, people are going to think about refinancing. They're going to start calling and reaching out. And Mortgage Matchup.com going to independent mortgage brokers, that's going to happen. And so MSR write-downs will be massive. Origination volumes and gain on sale will go up. And so how does that balance out?

Matt Ishbia: You can determine how you want. Obviously, nobody controls the MSR write-ups and write-downs. We never take credit when it goes up. We don't want to take credit when it goes down. We want to focus on origination. And we're not that far away from those numbers. But you know, but once again, I'm not watching the market this morning. It could be already at four for all. I know the 10 year and we're in order. For three, eight, three, nine. I don't even know what it's at. But whatever it's at, you know, you can't control it. So we just have to be the most prepared company.

Matt Ishbia: Obviously, nobody controls the MSR write-ups and write-downs. We never take credit when it goes up. We don't want to take credit when it goes down. We want to focus on origination. And we're not that far away from those numbers. But once again, I'm out watching the market this morning. It could be already at four for all I know, the 10-year, and we're 380, 390. I don't even know what it's at, but whatever it's at, you can't control it. So we just have to be the most prepared company. That's my job as a CEO and chairman, and I think we're doing it.

Matt Ishbia: That's my job as a CEO and Chairman. I think we're doing it. Hey, we like it.

Eric Hagen: Hey, we like it. Following up on the MSRs, do you have any perspective on how you see the demand for MSRs developing with lower rates? Like, do you see the risk of lower MSR values impacting the demand side from the folks who typically show up to buy MSRs?

Matt Ishbia: Following up on the on the MSR. I mean, any perspective on how you see the demand for MSR is developing with lower rate. If you see the risk of lower MSR values impacting the demand side from the folks who typically show up to buy MSRs. I don't know if I'll see. So first of we see. So a lot opportunistically and understand the market and are seeing where the rates were. Do I see, you know, for us, we don't buy MSRs. We originate them. We, we originate loans where there's nobody in the country that originally more loans than us, obviously, which is more MSR.

Speaker Change: Hey, we like it. Following up on the MSRs, any perspective on how you see the demand for MSRs developing with lower rates? Do you see the risk of lower MSR values impacting the demand side from the folks who typically show up to buy MSRs?

Matt Ishbia: I don't know if I'll see it. So first off, we sold a lot opportunistically and understood the market and understood where the rates were. Do I see? You know, for us, we don't buy MSRs. We originate them.

Speaker Change: I don't know if I'll see it. So first off, we sold a lot.

Matt Ishbia: We originate loans where there's nobody in the country that originates more loans than us, obviously, which originates more MSRs. And so do I see a slowdown? I don't know if I'll see a slowdown in people buying MSRs because that's the only way they can originate. They have to actually have the servicing loan to have a chance, but that's not how UWM is.

Matt Ishbia: And so do I see it slow down? I don't know if I'll see a slow down of people buying MSRs because that's the only way they can originate. They have to actually have the servicing loan to have a chance. That's not how UWM is. We don't need the loan to have a chance. Our brokers get the loans because they're out there under the best for the consumers. And so I'm not as concerned about will people not buy. People are going to still be buying. I'm not really in the mood to sell right now. We feel like we've de-risked significantly.

Speaker Change: And so, do I see a slowdown? I don't know if I'll see a slowdown of people buying MSRs.

Speaker Change: because that's the only way they can originate. They have to actually have the servicing loan to have a chance.

Matt Ishbia: We don't need the loan to have a chance. Our brokers get the loans because they're out there and they're the best for the consumers. And so I'm not as concerned about whether or not people will buy. People are going to still be buying. I'm not really in the mood to sell right now.

Eric Hagen: We feel like we've de-risked significantly, and we're all about origination. A thousand percent of our focus is on origination, being prepared, helping brokers be prepared, and making sure we deliver to the shareholders what I've been telling everyone. And I think we've been doing that. So it'll be interesting. I don't think it'll be a massive shift because a lot of those servicers buy beyond cash flows. They buy for a chance to refinance.

Matt Ishbia: And we're all about origination. A thousand percent of our focus is on origination, being prepared, helping brokers be prepared, and making sure we deliver to the shareholders that I've been telling everyone. And I think we've been doing that. So it'll be interesting.

Speaker Change: in the mood to sell right now, we feel like we've de-risked significantly and we're all about origination. A thousand percent of our focus is on origination, being prepared, helping brokers be prepared, and making sure we deliver to the shareholders what I've been telling everyone.

Matt Ishbia: I don't think it'll be a massive shift, but because a lot of the shares that we've been doing, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing that, we've been doing Yes, I appreciate you guys.

Eric Hagen: Yep, yep. I appreciate you guys. Thank you so much.

Matt Ishbia: Thank you so much.

Mark Devries: And your next question comes from the line of Mark DeVries with Deutsche Bank. Your line is open.

Mark Devries: And your next question comes from the line of Mark DeVries with Deutsche Bank. Your line is open. Yeah, thanks.

Speaker Change: And your next question comes from the line of Mark DeVries with Deutsche Bank. Your line is open.

Mark Devries: Yeah, thanks. I was hoping to get a sense of, you know, what kind of improvements you think you're making with the technology investments in your time to close and kind of, you know, how durable that would be under significantly higher volumes and what that might mean for your potential to take even more share within the broker channel if we get a surge in volume.

Mark Devries: What's hoping to get a sense of what kind of improvements you think you're making with the technology investments in your time to close and kind of how durable that would be under significantly higher volumes and what that might mean for your potential to take even more share within the broker channel if we get a surge in volume. Yeah, so turn times are huge deals. Speed to close with all the technology. So I'll talk about my technology saying, but all the world with trigger leads and all the things that go on, people need to close loans fast.

Mark Devries: Yeah, thanks. I was hoping to get a sense of...

Mark Devries: and your time to close.

Mark Devries: And kind of, you know, how durable that would be under significantly higher volumes and what that might mean for your potential to take even more share within the broker channel if we get a surge in volume.

Matt Ishbia: Yeah, so turn times are a huge deal. Speed to close with all the technology. So I'll talk about my technology saying, but in the world with trigger leads and all the things that go on, people need to close loans fast. You need to get a borrower bought in, and close the loan fast and efficiently.

Speaker Change: Yeah, so, turn times are a huge deal, speed to close, with all the technology, so I'll talk about my technology stand, but all the world with trigger leads, and all the things that go on, people need to close loans fast.

Matt Ishbia: And you get a viral bought in close alone fast and officially. When rates do drop, you're going to see everyone's turn times back up. We're the fast in the country right now, 13, 14, 15 day. We're the fastest in the country by a long shot. We will maintain that across the board, or if we get a little bit worse, we get worse by a day. Everyone else is 40, 45. They might go to 50, 60 days. Some places might go to 70 days to close loans. That's what happened before, and that's what we'll happen again.

Matt Ishbia: When rates do drop, you're going to see everyone's turn times back up. We're the fastest in the country right now, 13, 14, 15 days. We're the fastest in the country by a long shot. We will maintain that across the board, or if we get a little bit worse, we get worse by a day. Everyone else is 40, 45.

Matt Ishbia: They might go to 50 or 60 days. Some places might go to 70 days to close loans. That's what happened before, and that's what will happen again. And so our gap will widen because of our technology and because of our service levels, and because of our staffing levels. Now, with that being said, the technology we've invested in, I'm going to hold some of that back, some of the things that we've done, because some of the stuff we've done, I think is going to really wow a lot of people and do some really interesting things.

Speaker Change: Across the board or if we get a little bit worse we get worse by a day Everyone else is 40 45 they might go to 50 60 days some places might go to 70 days to close loans That's that's what happened before and that's what will happen again. And so our our gap will widen

Matt Ishbia: And so our gap will widen because of our technology and because of our service levels and because of our staffing levels.

Speaker Change: Because of our technology and because of our service levels and because of our staffing levels now with that being said the technology we've invested in I'm gonna hold some of that back some of the things that we've done because some of the stuff we've done

Matt Ishbia: Now, with that being said, the technology we've invested in. I'm going to hold some of that back; some of the things that we've done because some of the stuff we've done. I think is going to really wow a lot of people, and some really interesting means I'd rather not get into all the details as of yet because we're not ready to be talked about. But we have built a lot of, we have 1700 technology people. At our company, every day working on technology for one focus: growing the broker channel, helping brokers win, helping UWM win, making things faster, easier for consumers.

Speaker Change: I think is going to really wow a lot of people and some really interesting things. I'd rather not get into all the details as of yet because it's not ready to be talked about, but we have built a lot of – we have 1,700 technology people.

Matt Ishbia: I'd rather not get into all the details as of yet because it's not ready to be talked about, but we have 1,700 technology people at our company every day working on technology for one focus: growing the broker channel, helping brokers win, helping UWM win, making things faster and easier for consumers. Like that's what we focus on all day. We don't have people in different countries and all around the country, all around America, working from home.

Speaker Change: at our company every day working on technology for one focus.

Speaker Change: growing the broker channel, helping brokers win, helping UWM win, making things faster, easier for consumers. Like, that's what we focus on all day. We don't have people in different countries and all around the country, all around America, working from home. They're in our office, and we have one team, one focus.

Matt Ishbia: Like, that's what we focused on all day. We don't have people in different countries and all around the country, all around America, working from home, doing their in our office, and we have one team, one focus, and one goal in all in one building. And so we're all focused on it. There's some great technology stuff. Some of it you've seen or heard about PA plus track plus bolts, a lot of these things, but then there's some you have not heard about, but we are really excited about it. But the biggest thing for you is in snow speed matters, speed will matter for consumers, saving 100 and 150 bucks, and for brokers and for engineers, it matters.

Matt Ishbia: They're in our office, and we have one team, one focus, and one goal all in one building. And so we're all focused on it. There's some great technology stuff. Some of it you've seen or heard about, like PA+, Track+, Bolt, a lot of these things, but then there's some you have not heard about, but we are really excited about it.

Speaker Change: and one goal in all in one building. And so we're all focused on it. There's some great technology stuff. Some of it you've seen or heard about PA plus tech, track plus bolt, a lot of these things, but then there's some you have not heard about, but we are really excited about it. But the biggest thing for you is in snow, speed matters.

Mark Devries: But the biggest thing for you is to know speed matters. Speed will matter for consumers, saving $100 and $150. And for brokers and for originators, it matters. And they lose loans, they trade loans, they compete with people for loans, and closing loans fast matters, and we are the fastest in the country by a long shot.

Mark Devries: Got it. Thank you.

Speaker Change: Speed will matter for consumers saving 100 and 150 bucks and for brokers and for originators It matters and they lose loans they trade loans They compete with people for loans and closing loans fast matters and we are the fastest in the country by a long shot

Matt Ishbia: And they lose loans, they trade loans, they compete with people for loans, and closing loans fast matters, and we are the fast in the country by a long shot. Got it.

Terry MA: Thank you. And your next question comes from the line of Terry Ma with Barclays.

Speaker Change: Got it. Thank you.

Terry MA: And your next question comes from the line of Terry Ma with Barclays. Your line is open.

Speaker Change: Thank you. And your next question comes from the line of Terry Ma with Barclays. Your line is open.

Terry MA: Your line is open. Hey, thank you.

Terry MA: Hey, thank you. Good morning.

Matt Ishbia: Good morning. I'm just had a follow up on again on sale margin. It's been pretty consistent to the last two quarters above 100 basis points. So I guess the question is kind of what gets you to low end and maybe going forward, what gets you comfortable kind of raising the low end of the guide? Yeah, well, so obviously a lot of things move. So people think, you know, we do, I think 108,106 back to back quarters, if we're pretty good numbers. But if I felt confident that we would never be in the 85 range, I would move that off the bottom.

Terry MA: Hey, thank you. Good morning. Just had a follow-up on the gain on sale margin. It's been pretty consistent the last two quarters above 100 basis points. So I guess the question is kind of what gets you to the low end and maybe going forward what gets you comfortable kind of raising the low end of the guide?

Terry MA: I just had a follow-up on the gain on sale margin. It's been pretty consistent the last two quarters above 100 basis points. So I guess the question is kind of what gets you to the low end, and maybe going forward, what gets you comfortable kind of raising the low end of the guide?

Speaker Change: Yeah, well, so...

Speaker Change: Obviously...

Matt Ishbia: Yeah, well, obviously, a lot of things are moving. So people think, you know, we did 108, 106 back-to-back quarters, which were pretty good numbers. But if I felt confident that we would never be in the 85 range, I would move that off the bottom. I won't say that it's never; it cannot go back down. That's why I have the range between 85 and 110. There are a lot of movements, right, like with a lot of volatility in markets, which we've seen, actually, as we're all aware of, that actually makes hedging and margins very, very tough to come by. MSR valuations go up and go down. That impacts the valuation on pricing on a day-to-day basis, hour-to-hour basis.

Speaker Change: a lot of things move. So people think, you know, we did I think 108 and 106 back-to-back quarters, which were pretty good numbers. But if I felt confident that we would never be in the 85 range, I would move that off the bottom. I won't say that it's never, it cannot go back down. That's why I have the range between 85 and 110.

Matt Ishbia: I won't say that it's never; it can not go back down. That's why I have the range between 85 and 110. There's a lot of movement, right? Like with a lot of volatility in markets, which we've seen, actually, as we’re all aware of. That actually makes hedging and margins very, very tough to come by. MSR valuations go up and go down that impacts the valuations on pricing on a day-to-day basis, hour-to-hour basis. And so I don't feel that it's like if I felt more confident that hey, it can never be 85, I would change the number.

Speaker Change: There's a lot of movement, right, like with a lot of volatility in markets, which we've seen actually, as we're all aware of. That actually makes hedging and margins very, very tough to come by. MSR valuations go up and go down. That impacts.

Speaker Change: the evaluations on pricing on a day-to-day basis, hour-to-hour basis. And so I don't feel that it's like, if I felt more confident that, hey, it could never be 85, I would change the number. So 85 to 110 is the guidance. I feel good about that. Do we try to have bigger margins? Absolutely. Do I feel good about our margins? Absolutely. But there's still, you know,

Matt Ishbia: And so I don't feel that it's like, if I felt more confident that, hey, it could never be 85, I would change the number. So, 85 to 110 is the guidance. I feel good about that.

Matt Ishbia: So 85 to 110 is the guidance. I feel good about that. Do we try to have bigger margins? Absolutely. Do I feel good about our margins? Absolutely. But there's still, you know, 50 days left in this quarter. There's a lot of movement that can happen. Rage could go up, rage could go down, volatility impacts, things, hedges, a lot of aspects. And so keeping that range is good. We feel good about 85 to 110.

Matt Ishbia: Do we try to have bigger margins? Absolutely. Do I feel good about our margins? Absolutely.

Matt Ishbia: But there are still 50 days left in this quarter. There's a lot of movement that could happen. Rates could go up, rates could go down, volatility impacts things, hedges, a lot of aspects. And so keeping that range is good.

Speaker Change: [inaudible]

Matt Ishbia: We feel good about 85 to 110. And then, to the question about what will make me move off the bottom, I think if the rates drop a little bit further, I could see myself moving off that bottom next quarter. I think that if we see steadyness again this quarter and rates take a little bit more of a dip, I feel confident in our capacity ability that I could move that number the next quarter on the bottom up a couple of different levels, one level or two levels, potentially. And we'll look at that. But not yet; it's not there yet.

Matt Ishbia: And then some of the question about what will make me move off the bottom. I think if the rates drop a little bit further, I could see myself moving off that bottom next quarter. I think that if we see a steadiness again in this quarter and Rage take a little bit more of a dip, I feel confident in our capacity ability that I could move that number the next quarter on the bottom up a couple different levels, one level or two level potentially. And we'll look at that. But not yet. It's not there. I still think 85 to 110 is the number.

Speaker Change: What will make me move off the bottom? I think if the rates drop a little bit further, I could see myself moving off that bottom.

Speaker Change: Next next quarter. I think that if we see a steadiness again this quarter and rates take a little bit more of a dip I feel confident in our capacity ability that I could move that number the next quarter on the bottom up a couple different Levels one level or two level potentially and we'll look at that but not yet. It's not there I still think 85 to 110 is the number and like I said, I haven't looked in the market It could it could be 85 to 110 next three quarters for all I know based on what the market does But I'm excited about moving off that number. Hopefully next quarter if the rates come down a little bit further

Terry MA: I still think 85 to 110 is the number. And like I said, I haven't looked at the market. It could be 85 to 110 next three quarters for all I know based on what the market does. But I'm excited about moving off that number hopefully next quarter if the rates come down a little bit further.

Matt Ishbia: And like I said, I haven't looked in the market. It could be 85 to 110 next three quarters for all I know based on what the market does. But I'm excited about moving off that number hopefully next quarter if the rates come down a little bit further.

Matt Ishbia: Okay, got it. That's helpful, Kolar. And then just on the MSR sales, you guys mentioned you'd be opportunistic, but you also mentioned you'd de-risk meaningfully at this point. So I guess going forward, can you maybe just talk about your appetite to sell higher-coupon loans, just given the demand still there? Yeah, we're off to...

Matt Ishbia: Okay, got it. That's helpful color. And then just on the MSR sales, you guys mentioned you the opportunistic, but you also mentioned you've the risk meaningfully at this point. So I guess going forward, can you maybe just talk about your appetite to sell higher coupon loans, just given the demand so there? Yeah, we're opportunistic with everything with selling MSRs, like we're not really focused on it. Like we had a strategy coming in this year. The strategy was to de-risk, was to sell MSRs in the first three to six months of the year and prepare for scale, technology operationally, and it's playing out how we expected.

Culler: Okay, got it. That's helpful, Culler. And then just on the MSR sales, you guys mentioned you'd be opportunistic, but you also mentioned you'd de-risk meaningfully at this point. So I guess going forward, can you maybe just talk about your appetite to sell higher coupon loans, just given the demands still there?

Matt Ishbia: Yeah, we're opportunistic with everything with selling MSRs, like we're not really focused on it. Like we had a strategy coming in this year, the strategy was to de-risk, to sell MSRs in the first three to six months of the year and prepare for scale, technology, and operationally, and it's playing out how we expected. And so I'm not saying we won't sell any more MSRs because people call us all the time to try to buy them.

Speaker Change: Yeah, we're opportunistic with everything with selling MSRs. Like, we're not really focused on it. Like, we had a strategy coming in this year. The strategy was to de-risk.

Speaker Change: three to six months of the year and prepare for scale.

Matt Ishbia: And so I'm not saying we won't sell any more MSRs because people call us all the time to try to buy them. However, it's not a focus of mine right now; my focus on origination, on scale, and dominance in this industry right now. And that's what we're focused on right now. So will we sell more possibly, but it's not a focus of mine right now or our organization because we're focused on those other things.

Speaker Change: Technology, operationally, and it's playing out how we expect it. And so, I'm not saying we won't sell any more MSRs because people call us all the time to try to buy them. However, it's not a focus of mine right now. My focus is on origination, on scale, and dominance in this industry right now. And that's what we're focused on right now. So, will we sell more? Possibly, but it's not a focus of mine right now or our organization because we're focused on those other things.

Matt Ishbia: However, it's not a focus of mine right now. I focus on origination, on scale, and dominance in this industry right now. And that's what we're focused on right now. So will we sell more? Possibly, but it's not a focus of mine right now or of our organization right now because we're focused on those other things.

Matt Ishbia: Great, thank you. Thank you.

Ryan Shelley: And your final question comes from the line of Ryan Shelley with Bank of America. Your line is open.

Speaker Change: Great, thank you. Thank you.

Ryan Shelley: And your final question comes from the line of Ryan Shelley with Bank of America. Your line is open. Hey guys, thanks for the question. I just had a quick one on expenses here. I noticed that direct loan production costs were up pretty significantly in the quarter. If you could just provide any color there. And as well as GNA, is this any color you could provide there and factors to consider looking forward. That'd be great. Thanks.

Speaker Change: And your final question comes from the line of Ryan Shelley with Bank of America. Your line is open.

Ryan Shelley: Hey guys, thanks for the question. I just had a quick one on expenses here. I noticed that direct loan production costs were up pretty significantly in the quarter. If you could just provide any color there, as well as G&A, just any color you could provide there and factors to consider looking forward, that'd be great. Thanks.

Ryan Shelley: Hey guys thanks for the question. I just had a quick one on expenses here. I noticed

Ryan Shelley: that direct loan production costs were up pretty significantly in the quarter. If you could just provide any color there, as well as G&A, just any color you could provide there and factors to consider looking forward, that would be great. Thanks.

Matt Ishbia: Yeah, so there's a lot of nuances and a lot of different things, but I guess I'd say naturally when you do more production, you're going to have more loan production expenses, right? We help cover credit reports.

Andrew Hubacker: Yeah, so there's a lot of nuances, a lot of different things, but I guess I'd say naturally, when you do more production, you're going to have more loan production expenses, right. We help cover credit reports. The credit for costs are gone up a lot of different things have gone up, but I really don't focus on expenses that much because I focus on winning and focus on growing. And right now is a growth mode, not an expense like you've even heard a lot of my competitors who've been playing the game of quite cutting expenses. You don't hear them talking about that anymore because the game's changed.

Speaker Change: Yeah, so there's a lot of nuances and a lot of different things, but I guess I'd say naturally, when you do more production...

Matt Ishbia: The credit report costs are going up. A lot of different things are going up, but I really don't focus on expenses that much because I focus on winning and growing. And right now, this is a growth mode, not an expense. Like you've even heard a lot of my competitors who've been playing the game of cutting expenses. You don't hear them talking about that anymore because the game's changed.

Speaker Change: You're going to have more loan production expenses.

Speaker Change: We help cover credit reports. The credit report costs are going up, a lot of different things are going up. But I really don't focus on expenses that much because I focus on winning and focus on growing. And right now is a growth mode, not an expense. Like you've even heard a lot of my competitors who've been playing the game of cutting expenses. You don't hear them talking about that anymore because the game's changed.

Matt Ishbia: We're focused on winning, which is revenue, which is origination, gain on sale, more brokers growing, loan officers converting the broker channel, and being prepared for the refinance opportunity along with the purchase opportunity, which I haven't hit on much because all I'm talking about refinancing is when rates drop a little more, more people will sell their houses, purchases will pick up, and inventory will pick up. It's going to be a big swing of opportunity, and so the expense game, our expenses will go up consistently with our volume, but it's tied to loan production, and it's not really relevant.

Andrew Hubacker: We're focused on winning, which is revenue, which is origination, gain on sale, more brokers growing. Loan offs is converting the broker channel and being prepared for the refinance opportunity along with the purchase opportunity, which I haven't hit on much because all I'm talking about refinances when rates stop a little more, more people sell their houses. Purchases will pick up; inventory will pick up. It's going to be a big swing of opportunity. And so the expense game, your expense will go up consistently with our volume, but it's like it's time to loan production. And it's not really relevant.

Speaker Change: We're focused on winning, which is revenue, which is origination, gain on sale, more brokers growing, loan officers converting the broker channel, and being prepared for the refinance opportunity, along with the purchase opportunity, which I haven't hit on as much because all I'm talking about refinance is when rates drop a little more, more people will sell their houses, purchases will pick up, inventory will pick up. It's going to be a big swing of opportunity, and so the expense game, our expense will go up consistently with our volume.

Matt Ishbia: Our G&A and our overall expenses from team members are in a pretty good spot. We're still hiring, but we're not hiring extremely high numbers because we've got our team, we've got our technology, we've got our systems, and we feel really good about where we are. The focus right now is on growth, scale, and being prepared, and we are. Liquidity is great. We've de-risked on MSRs. Expenses, yeah, we'll watch them, but that's not the game right now. The game is winning, and we're going to focus on winning right now.

Andrew Hubacker: Our GNA, like our overall just expenses from P team members, like we're in a pretty good spot. We're still hiring, but we're not hiring extremely high numbers because we've got our team. We've got our technology. We've got our systems, and we feel really good about where we're at. So the focus right now is on growth, scale, and being prepared. And we are liquidity is great. We've be risked on MSR's expenses. Yeah, we'll watch them, but that's not that's not the game right now. The game is winning. And we're going to focus on winning right now.

Speaker Change: like it's tied to loan production, and it's not really relevant. Our G&A and like our overall just expenses from team members, like we're in a pretty good spot. We're still hiring, but we're not hiring extremely high numbers because we've got our team, we've got our technology, we've got our systems, and we feel really good about where we're at. So the focus right now is on growth.

Speaker Change: scale and being prepared, and we are. Liquidity is great. We've de-risked on MSRs. Expenses, yeah, we'll watch them, but that's not the game right now. The game is winning, and we're gonna focus on winning right now. Thank you.

Ryan Shelley: Thank you. Got it. Thanks. Appreciate the question.

Matt Ishbia: And that will wrap up our question-and-answer portion.

Matt Ishbia: I would like to turn the call back over to Matt HBF for closing remarks. Now, well, thank you very much. Thanks for all the questions. Really appreciate the support and the great questions that were there today. If you have any other follow up, of course, Blake Kolo is always available in our team. And look forward to a great quarter and talk to you next quarter. Have a good one.