Q3 2024 UWM Holdings Corp Earnings Call
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Christina: Good morning, my name is Christina and I will be your conference operator today.
At this time, I would like to welcome everyone to the UWM Holdings Corporation 3rd Quarter 2024 Earnings Conference Call.
Christina: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad.
If at any time you would like to remove yourself from the queue, please repress star 1. Thank you. Blake Kolo, you may begin your conference.
Christina: Good morning, this is Blake Kolo, Chief Business Officer and Head of Investor Relations.
Thank you for joining us today and welcome to the third quarter 2024 UWM Holdings Corporation's earnings call. Before we start, I would like to remind everyone that this conference call includes four looking statements.
For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the earnings release that we issued this morning.
Our commentary today will also include non-GAAP financial metrics.
Christina: For information on our non-GAAP financial 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.
Speaker Change: 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.
Speaker Change: Over the past couple years, two of our main goals have been very clear, growing UWM in the broker channel market share by dominating a purchase and investing and preparing for the next refi boom, while others in the industry are cutting staff and tech investment just to survive.
Speaker Change: Today I can say with full confidence that we achieved both. Our share growth and purchase dominance is undisputed. In fact, our purchase market share has grown about 300% since 2019 and historically whenever we have grown purchase market share we have kept it. So we feel really great about our positioning there.
Speaker Change: Now, the refi boom has not fully materialized, but we have seen a preview of it, and we were able to capitalize on it instantly while others were caught flat-footed.
Speaker Change: Preparation is the key to winning. Best teams in sports and in business find a way to win in the present while preparing for the future and that's what we have done here. I couldn't be prouder to lead a team
Speaker Change: That has been the unanimous number one lender for three consecutive years now along with the top purchase lender for four years and the top wholesale lender for a decade now. We are dominating the mortgage industry and we're really proud of where we stand. We're excited for the focus on the years ahead. Now let's talk about the third quarter.
Speaker Change: We close with $39.5 billion of total production, which is our biggest quarter in three years, and well above our guidance. Importantly, this total production primarily affects another dominant purchase quarter, with over $26 billion in purchase production.
Speaker Change: Notably, we also closed $13.3 billion in refis, which is our biggest refi quarter in a couple years and a clear indicator that when the market returns to a refi market fully returns, we will succeed in that as well.
Speaker Change: We generated net income of almost 32 million dollars which is inclusive of a 446 million dollar decline of fair value of MSRs which as you know is tied to changing interest rates and has nothing to do with how we operate our business so to be profitable in a quarter like that with that big of an MSR hit is really unheard of and speaks to the strength of our business
Speaker Change: We are also pleased with the adoption we saw of many of our tools and technologies into their quarter.
Speaker Change: TrackPlus usage has increased. It's a great technology and tool that helps brokers save consumers money. PA Plus continues to gain traction. Bolt Technology continues to change the industry standards by allowing brokers to have initial approval and qualify borrowers in 15 minutes less. And of course, CHAT UWM, our AI-powered technology. You know, so many of these technology and tools are being utilized and used more and more, which is helping the brokers win.
Speaker Change: Remember, with as much business as we did in 2020 and 2021, these technologies that add efficiency to our business and the brokers just did not exist at the time.
Speaker Change: Broker X, which was announced in third quarter, is off to a great start helping brokers train and license new loan officers.
Speaker Change: UWM and the whole broker community are in a great position to continue winning now while being prepared for what's to come.
I'll now turn things over to Andrew Hubacker, our CFO.
Andrew Hubacker: Total production volume of 100.8 billion here to date is an approximate 20% increase from the same period in 2023.
Andrew Hubacker: Year-to-date gain margin increased to 111 basis points from 92 basis points last year
Speaker Change: We have continued to invest significantly in the people, processes, and technology which we think prepare us well for the next market cycle. And these increases in volume and gain margin have allowed us to maintain operational profitability while making these investments.
Speaker Change: As for our balance sheet and liquidity position, we ended the third quarter with total cash of over $600 million and only $300 million outstanding on our lines of credit.
Speaker Change: There were a few additional MSR sales executed during the third quarter, but most of our MSR and excess sales for the year were front-loaded to the first half.
Speaker Change: Year-to-date, net cash proceeds from MSR sales approximated $2.6 billion, and we ended Q3 with an MSR portfolio of approximately $212 billion.
Speaker Change: Total accessible liquidity approximated $2.5 billion at the end of the quarter, including cash and available borrowing capacity. And our total equity, capital, and leverage ratios continue to be at acceptable levels in the current environment.
Speaker Change: Overall, we believe that we remain well-positioned with more than sufficient liquidity to capitalize on future market opportunities.
Speaker Change: Okay, I will now turn things back over to our Chairman, President, and CEO, Matt Ishbia, for closing remarks. Thanks, Andrew. I'll close with a few points.
Matt Ishbia: The Broker Channel, through this year, has achieved its highest market share since 2009. And a part of that is due to the amazing loan officers in the industry and the service we provide. But it's also because we save the consumers thousands of dollars in many situations and make the process faster, easier, and cheaper for consumers.
Matt Ishbia: Mortgage brokers are the best place for consumers and consumers are realizing that day over day.
Speaker Change: One other major differentiator at UWM I want to mention is since 2016 none of my direct reports have left the company outside of the passing of our CFO Tim Forrester. We've had a consistency in leadership, continuity, and we've grown and built this business together as a team. This is a big differentiator in all industries but definitely in our mortgage industry as most of my competitors have major turnover at the higher ends of the executive team.
Speaker Change: Another point is about the strength of our purchase business. 2024 is on track to be the lowest year of resisting home sales since 1995. And yet, through three quarters, we've delivered nearly $75 billion of purchase production, and we're on track to break the full-year all-time purchase production record. Think about that. It makes me really excited to see when we're capable of, when the purchase market rebounds in 2025 and beyond, with lower rates and more inventory.
Speaker Change: I'll reiterate something I said in the last call. Our focus is on making the broker channel number one, which means the broker channel share higher than 50 percent, which is almost double where it is today.
Speaker Change: But regardless of what the market does, we'll succeed. If rates stay higher, we'll continue to grow share. And if rates go lower, we'll make a lot more money and continue to win. As I've said many times, we are built for the long term and we're really ready and able to embrace all cycles.
Speaker Change: Before I talk about the guidance, I want to talk about the market in third quarter. As I've said before, I see 3.75 as a key level on the 10-year. If it goes below that, we have a massive, massive opportunity.
Speaker Change: In this quarter, it didn't quite get there, and now it's back up to 440, 450, wherever it is right now. But it flirted with the 375 levels for a couple weeks, and that's why we were able to post such a big refi number in the quarter.
Speaker Change: Think about the stock for a moment. We feel really great about where we're at. We've increased the float.
We've proven that we consistently pay a dividend.
Speaker Change: which is now 6-7% based on where the stock price is. And I just laid out a pretty strong case for what the future of our business looks like. Not only because we understand the markets and where the tenure probably will be with the Fed cuts and all the things that are going to happen, but just our business and how we're prepared for the refi boom. We've seen a little glimpse and we feel great about where we're at. It's a great time to be part of the UWM team.
Speaker Change: Turning to guidance, we expect our third quarter production to be between $34 and $41 billion. And I continue to see the market and profitability strengthening, and I feel really confident that our gain margin will basically remain between 85 and 110 basis points, and we'll continue to do great things. I want to thank our team members, clients, shareholders.
Speaker Change: and we're gonna continue to win together here at UWM. Now let's turn it over to the Q&A and we'll go from there.
Speaker Change: Thank you, and at this time I would like to remind everyone in order to ask a question press star then the number one on your telephone keypad. If at any time you would like to remove yourself from the queue, please repress star one.
Speaker Change: We will now begin the Q&A session. Your first question comes from the line of Derek Summers of Jeffries. Your line is open.
Speaker Change: Hi, good morning everyone. In the EBITDA bridge is the line item gain on other interest rate derivatives related to hedging the MSR?
Thank you.
Yeah, thanks for the question, Derek. No, it's not.
Speaker Change: You know, we don't really hedge MSRs, we do a lot of everything, we sell our MSRs, we've gone through a lot of different things over the last couple of years as we talked about on how we believe MSRs, obviously selling a lot of our higher WAC stuff has turned out to be very positive and a good way for our business.
Speaker Change: The interest rate derivative is something that we look at, and we look at all the time. Sometimes we'll be positive, sometimes we'll be negative. We look at different ways of understanding the market, analyzing the market, and addressing the market. And so, I don't look at it as a hedge, we don't really hedge our MSRs, but there is obviously some opposite trends based on MSRs, sometimes when we put out that interest rate derivative. But that's a decision we make with our risk committee, our CFO and myself, on when we do that, when we don't do that, and how we run the business.
Thank you.
Speaker Change: Okay, great. And then in terms of gain on sale margins in the quarter, kind of what were the puts and takes driving a higher quarter over quarter?
Speaker Change: Yeah, well, like I said, you know, you got a little glimpse of, you know, whatever the three weeks or the 10-year was close to where we talked about where refis became a thing. And when refis become a thing, as I've been saying for years, our margins will go up and our volume will go up. And so we kind of got a little glimpse of that where, you know, we've probably been more in our range that I guided towards the last quarter and this quarter based on where the 10-year was. And then it dropped down. We took advantage of it. Our brokers took advantage of it. We all did very well. And so the gain on sale margin, you know, got propped up because of that along with the volume. So I think it's a great glimpse into the future. You know, we all believe that 10-year will be down below four and below 335 over the next 6, 12, 18 months, potentially, or longer. And you can kind of see that our volume and our gain on sale will go up.
go up, just as we've been saying for years.
Thanks, that's all from me.
Speaker Change: Your next question comes from the line of Boze George of KBW. Your line is open.
Boze George: Hey, good morning. I just wanted to follow up on the gain on sale. Can you just talk about trends you're seeing, you know, in the fourth quarter now with the backup in rates and seasonality as well?
Speaker Change: Yeah, so, thanks for the question. Obviously, once again, that guided to the way I guided based on understanding where the market is right now versus where it was in, you know,
Speaker Change: August and early September, right? So obviously that August and early September.
Thank you.
Speaker Change: rates give us an opportunity to make a little bit more on margin. Also, we have a lot of other ancillary products that we talked about, I mentioned PA Plus and Track Plus and some of these things that are adding margin onto the bottom line or top line, however you wanna think about that as well.
Speaker Change: But, you know, we see where the market is right now, and I think I guided to the right area, 85 to 110. And as you've seen over the last couple of years, I've kind of moved it up different levels and look at it, and when the 10-year drops a little more and rates...
to be prepared for...
Doubling our company. Literally, can we double our company?
Speaker Change: All right. And that's very realistic. That's what I said about the stock. Like, we're in a great, great position. We're making money. We're doing great. Stock pays a dividend of 6%, 7%, whatever it is right now, based on how low the price is. And we're, like, completely in control of the business, ready to double, potentially, right? Double might be an extreme, but it might not be, to be honest. So it's a huge opportunity to do $40, $50, $60 billion quarters.
Speaker Change: when rates drop. In the meantime, we'll plug away and dominate on the purchase market like we have been.
Speaker Change: That's great. Thanks. Actually, there's one on the ancillary products. Can you just talk, you mentioned TRAC and TRAC+, how's the traction on those products going?
Speaker Change: It's going well. Those products are doing well. Just like anything, you've got to get adoption of our clients. You've got to make sure you execute at the highest level. And then you've got to continue to build it. So it's going as planned. We wanted to make sure those products were out, ready to roll prior to the refi boom. And they are. And then how do we ratchet that up and grow? It's not going to be a huge gain-on-sale difference, but it is just another way to help consumers save money.
Speaker Change: Help brokers differentiate themselves and make it so that people want to work with UWM, and so it's a win-win-win.
Thank you.
Speaker Change: Your next question comes from the line of Eric Hagen from BTIG. Your line is open.
Eric Hagen: Just looking at the adjusted EBITDA, would you say that that's a good reflection of your cash earnings? Are there any considerations which might kind of affect the cash earnings relative to that number? And is the cash flow that's generated from selling MSRs also reflected in the adjusted EBITDA figure?
Speaker Change: Yeah, I really don't look at it that way, Eric. You know, Andrew, if you want to comment on it, just in general. But I don't – that's not – it's not a reflection of the cash flow, based on MSRs and how you keep MSRs, whether it's with the different capitalization of it, it doesn't really tie to cash flow. But, Andrew, you want to comment? Yeah, no, I think that's right. Just capitalization of MSRs is not excluded from that. But the sales of MSRs, I think a combination of capitalization and sales of MSRs gets you closer to more of a cash flow metric.
Okay, I think I got you
Speaker Change: Maybe one more on the margins I mean does the gut does the guidance around The margin going forward incorporate these these latest rate moves over the last couple weeks And do you think there's any room for margin expansion at these higher rates or is that not really something that investors should focus on?
Speaker Change: Well, as you saw, there's definitely room for margin expansion when the market moves a little bit, right? So as soon as the market moves, we take advantage of that and have that opportunity. I guided the 85 to 110 last quarter, and we put up 118 basis points well over the guidance. Based on where I guided this time, you know, if the market would have stayed...
Speaker Change: where it was, I'd be guiding to a higher margin, if that's answering your question. The market has not only backed up, it backed up quite a bit.
Speaker Change: to where the tenure is 435, 440, 450, whatever it is, rate the second, I don't know. But based on that, 85 to 110 is the right guidance and we feel really confident in that.
Got you. Really helpful. Thank you guys. Thank you.
Speaker Change: Your next question comes from the line of Jeff Adelson from Morgan Stanley. Your line is open.
Speaker Change: Hey, good morning. Thanks for taking my question. You had a really nice quarter for refi this quarter I guess just with the strength and applications we saw at the end of last quarter and sort of the fade we've seen You know thus far this quarter down You know the refi index from NBA showing us down about 50% since since the quarter end for refi Just curious like how much of this
Speaker Change: 34 to 41 is just, you know, the kind of follow-through of closing the rate lock you saw at the end of last quarter and
Speaker Change: Does the midpoint of the guide kind of embed where the tenure and mortgage rates are sitting today? Maybe just sort of talk through what you're seeing in the rate lock volume so far this quarter versus last quarter. Thanks.
Yeah, so I don't really...
Speaker Change: I look at the rate lock volume as an indicator of how we do our business. I look at imports, I look at registrations, I look at submissions, I look at our flow of our business, our approval condition pipeline.
Speaker Change: So there's a lot of other aspects and details I look at, which is obviously different than other people that run their business. But the other thing about our business is...
Speaker Change: We're different, you know, a lot of people will get a lot of rate locks from September and close them in November, December That's not UWM. UWM closes them in 10, 12, 14 days So you've got that 39 and a half billion dollar pop based on locks from September to be clear, you know and obviously so now with that being said
Speaker Change: You know, purchase market usually slows down in the fourth quarter. The refi market has slowed down, as you pointed out. But do we feel confident we can still do 34 to 41? Yes, we do. October was a 23 business day month. November and December are obviously shorter months with the holidays and a lot of things and a lot of times brokers and all people in the world take some time off between the 15th of December and beyond. And so we're cognizant of that. I feel very confident that we'll hit between 34 and 41 and between 85 and 110. I think the best part about this quarter was I was able to show, as we've been talking for years, that we are prepared and ready to dominate on the refi market just like we have on the purchase market. And as soon as that market comes to our direction, we will capitalize on it and capitalize on it very quickly.
Speaker Change: You know, where it's basically been at or went to last couple days after the election. Then you'll see what I kind of posted. So I feel good about where we're at. We'll hit 34 to 41 and be prepared for a dominant 2025 on purchases and hopefully on refis as well.
Speaker Change: And just any update on sort of the update you're seeing on the new Cashout 90 product? I know it's only been three weeks, so just curious if there's any sort of early reads you're seeing there.
Speaker Change: Yeah, it's been it's been a great program obviously exclusive with us and something that's differentiating our clients the the issue obviously since we Rolled it out rates have done nothing but go up right so there's a balance of how much of that we saw and expect to see Versus what it will be when the I keep saying the 10-year But when rates you don't understand how 10-year and rates tie together when rates are a little lower, so it's been great It's definitely a differentiator, but it's not as high volume as you'd expect in a refined market It will be a extremely high volume I believe
Okay, great. Thank you.
Speaker Change: Your next question comes from the line of Terry Ma from Barclays. Your line is open.
Speaker Change: Hey, thank you. So you've mentioned for a while about investing and preparing for lower rates ahead, and you pointed toward the two to three week stress test this quarter. Maybe just talk about what ending you're in with respect to those investments, and then maybe longer term, how much more upside to refi share you can actually get.
Speaker Change: Yeah, so I mean our investments have been wonderful. We feel great about where we're at. We're prepared We don't need to go hire a bunch of people to double this business
Matt Ishbia: I guess I say double, it's probably not, I don't want to exaggerate it, but significantly grow very quickly so we can handle a lot more volume right now with our technology enhancements, with our hiring, with our training, with our coaching. We are prepared and ready to go today, right, and tomorrow. And so that's my job as the CEO, as I said at the very beginning, is one, to dominate the purchase market, show profitability, continue to pay the dividend and reward my shareholders, and then be prepared.
Matt Ishbia: be the most prepared company in America, which we are. We're prepared on technology, we're prepared on efficiencies, we're prepared on operations. And when that happens, we will significantly grow. And I think that will be 2025. And I think you'll see the results in our volume growing and our margins growing next year. With that being said, I don't control interest rates, so I don't spend too much time focused on them because when they come, I'll be prepared. When they stay where they're at, we'll dominate in purchase.
Matt Ishbia: And that's why it's great to be part of the Broker Channel, what we do and support our brokers and build and our business is profitable exactly how it is today, but we can scale. We can scale quickly with our team and our staffing that we are at right now. So we feel great, we're prepared, as good as we've ever been, and we're now just watching the market and continue to dominate on a day-to-day basis until that happens.
Speaker Change: Got it. And I think you mentioned in your prepared remarks that you were able to increase the float. Can you maybe just talk about that and then your plans for increasing the float in the future?
Speaker Change: Well, it's been a common theme for my investors is how do we get more float out there? What can you do to do it? And we've done different creative ways to get more float out there to the market and we will continue to look at that right now I'm not looking at that anymore this year. However, we will always look at ways because
Speaker Change: Float matters. And so if that's something that's holding our stock price down, which I've been told for years it is.
Matt Ishbia: will continue to do our best to get more float out there in the hands of our investor base so they can continue to invest in our company and go from there and take advantage of the high dividend we pay and all the other things. So we'll continue to look at that. I'm always opportunistic in that and looking at ways to help, but at the same time there's certain things I won't do to expand it, but right now that's what we focus on the fourth quarter or the third quarter, excuse me, and hopefully you've seen some of those results and the float is materially different than it was six months ago.
Thank you.
Great, thank you.
Speaker Change: And once again, if you would like to ask a question, press star, then the number one on your telephone keypad. Your next question comes from the line of Brad Capuzzi from Piper Sandler. Your line is open.
Brad Capuzzi: Hi, thank you for taking my question. Can you just give us an update on the dynamics playing out within the broker channel? Some of your peers have been talking up opportunities within the broker channel recently. Obviously UWM is a stronghold on the channel and it's continued to grow market share, but was wondering if you expect pricing to be rational and if you're seeing any increased competition?
Speaker Change: Cute little things they say, but the truth is we dominate the Wholesale Channel because we care about the brokers and only the brokers. We invest in the brokers and only the brokers. We want the brokers to win and only the brokers to win. And when they win, UWM wins because we're a team.
Speaker Change: Zero concern about that. I control the margins, they don't. They will follow our lead and enjoy that. And at the same time, we'll continue to grow and build our business. And so, we feel great about where we're at. I don't really pay attention to what they're saying, but the truth is they have to say something on their earnings calls to make themselves feel good and make you guys want to invest in them, but right now, we dominate the channel and that's not because we're the best, it's because we care the most. We care about brokers. We will help the brokers win. We have helped the brokers win, and brokers know that.
Speaker Change: And so all I care about is helping the brokers win our channel. Our focus is help the brokers grow, help them succeed and dominate. And when they succeed and dominate, UWM does as well. And it's been a pretty good, you know, way for success over the last couple of years.
Speaker Change: And then just the last question for me, in terms of MSRs, you mentioned a few sales this quarter with the beginning of the year being more front-loaded. What is your expectations going forward with MSR sales? Thanks.
[inaudible]
Speaker Change: Yeah. Once again, opportunistic. We'll look at it again. You know, in looking at the cash needs of the business and people want to pay us high multiples, which they do, we'll sell some MSRs. And at the same time, we feel really great about our business and don't feel like we have to sell any MSRs in certain situations. So we manage that. We look at that. We meet with our risk committee. I meet with my executive team, and we make decisions. We feel really good about where we're at. We're obviously still producing a high volume of MSRs.
Speaker Change: where most people don't and so people that are you know new originations are Wanted by a lot of these MSR buyers, and so we're obviously a big target for that So we'll continue to do that and look at that, but we have no requirement
Speaker Change: to sell MSRs. We look at that opportunistically and whatever I think is best for the business, the investors, our partners, everything, and we analyze it on a day-to-day or what's called more realistically a week-to-week, month-to-month basis.
Thank you for taking my questions.
Speaker Change: Thank you and your last question comes from the line of Doug Harder from UBS. Your line is open.
Speaker Change: Thanks. Matt, can you talk about the higher gain that you achieved? Is that a difference in gain between...
Speaker Change: Andrew Hubacker, Matthew Ishbia, Mathew Ishbia, Andrew Hubacker, Mathew Ishbia, Andrew Hubacker,
Speaker Change: Yeah, I mean I think the gain on sale is tied to, I talked a little bit about the ancillary products but I really think it's tied to being able to handle the capacity and the reality is when rates drop.
Speaker Change: People think refi's are more price sensitive, but they're actually I don't look at it that way I look at it is there's so much volume people want to close their loans fast and efficiently and when a borrower is saving $94 a month versus $96 a month a lot of times borrowers are not Focused on that they wanted to get the savings now and so our brokers recognize that and they want to close loans fast and efficiently So gate on sale for the whole industry not just UWM will go up when refi's come back And so based on the tenure you can probably pretty simply draw a little conclusion based on
10-year
the tenure rates.
or excuse me, the 10-year...
versus.
Speaker Change: Gain on sale, and as the tenure goes down into the threes, margins for UWM, but really everyone in our industry will go up.
Speaker Change: and how much they go up is depending on their preparation for scale and the preparation and ability to close and execute.
Speaker Change: but it will definitely go up. It's definitely more price-sensitive and price-competitive when the tenure is higher.
Speaker Change: $101 or $186 or $188. People are not as price sensitive on that. They're just excited to say $186. And so I think that's just not, just that's not a UWM thing, that's an industry thing. And so when the ten year goes down to 375, 350, you'll see all of my competitors, everyone in this industry will have higher margins and higher volumes. So it's a very positive thing for our industry.
Speaker Change: In the meantime, we'll continue to do great in where we're at.
I appreciate it, Matt. Thank you.
Speaker Change: And we did have an additional caller come into the queue, so this will be your last question. It comes from Jordan Jay of Philly Financial. Your line is open.
Speaker Change: Thanks for taking my questions guys. You mentioned that had rates stayed a little bit lower that you were prepared to guide up on the margins and had rates stayed where they were in mid to late September, where do you think the fourth quarter margin guidance would have been?
Yeah, thanks for the question. So obviously, I don't.
Speaker Change: No way, exactly what it would have been. I would have definitely looked at it, you know, analyzing the market and seeing where it stayed and Understand the levels, but I understand that you saw that our margins was 118 I wouldn't have thought if the tenure would have went down our margins would not go down
Speaker Change: Right, so that's how I would have thought about that is that...
Speaker Change: So, but understand where the market is today, when the 10-year goes down, our margins will go up.
Speaker Change: And when our margins go up, we will do more volume with higher margins and a better return for our investors. Our dividend will continue as it's continued going forward. So as investors, like I said at the end of my prepared remarks was...
Speaker Change: It's a great time to be a partner at UWM because you know you're getting a great dividend today And you have the upside of the stock price which I know some You know analysts believe will go much higher We believe will go much higher, and you get the benefit of gain on sale volume and you know a tailwind obviously with the new President there will be some new changes like a lot of really positive things
Speaker Change: in our business. So we feel like there's a nice tailwind behind us. We feel great. But at the same time, we're going to sit here and patiently wait while they're tenure to see what happens with the rates. But in the meantime, we'll continue to dominate on purchase, help our brokers grow, continue to build the business, and be the most prepared mortgage company in America.
Speaker Change: Does the mortgage spread to treasuries impact that number as well because that's widened out appreciably?
Yeah, of course it does.
Speaker Change: So, obviously, whether that's wider or thinner, that's all tied to it. That's why, as your, obviously, instincts and understanding and knowledge, the 10-year is not the perfect metric. I'm just using it because it's the metric everyone talks about. Obviously, the spread between that changes. As it gets bigger, it's less exciting for me, and when it gets smaller, it's more exciting. But in general, it's...
Speaker Change: The trend I'm talking about, the 10-year, is a good indicator for everyone to understand where the refi action will be based on where the market has been on 22, 23, and 24, and the 10-year at 375 is a pretty good bellwether. And below 375, I think you'll see...
Speaker Change: A lot of refi activity, higher margins, and a little bit of fun for all the investors and us at UWM and our brokers and for consumers. So everyone's going to win across the board.
Speaker Change: But I guess my point is, last thing is, even if the 10-year stay is higher, mortgage spreads to Treasuries could narrow even to where they were six months ago, much less that there are historic highs, and you could get a wider gain on sale margin from that into 2025.
Speaker Change: Absolutely. That sounds like fun for me too. You know, I think all those things can happen. There's 38 variables. This is going to be the most common one, and we feel really good about it. We're ready.
Okay, thank you.
Thanks for the question.
Speaker Change: Thank you, and that will wrap up the Q&A portion. I'd like to turn the call back over to Matt Ishbia for closing remarks.
Matt Ishbia: Yeah, thank you, and thanks everyone for the questions and being part of it. We're excited about where we're at at UWM. We're excited for the fourth quarter, and we're really excited for 2025. So the company is in a great position. We appreciate the support, and we're excited to continue to win with our broker partners. Our brokers are doing great. We're doing great, and we're going to continue to win together as a team. Thank you. Have a great day.
Speaker Change: Thank you. This concludes today's conference call. You may now disconnect.