Q3 2025 UWM Holdings Corp Earnings Call
Speaker #2: Good morning . My name is Aaron and I'll be your conference operator for today . At this time , I'd like to welcome everyone to the UWM Holdings Corp third quarter 2020 Earnings Conference call .
Speaker #2: All lines have been placed on mute to prevent any background noise . After the speakers remarks , there will be a question and answer session .
Speaker #2: And if you would like to ask a question during that time , simply press star followed by the number one on your telephone keypad .
Speaker #2: If at any time you'd like to remove yourself from the queue, please press star followed by the number one again. Blake Kolo.
Speaker #2: You may begin your conference . Thank you .
Speaker #3: Good morning . This is Blake Kolo chief business Officer and head of Investor Relations . Thank you for joining us . And welcome to the third quarter 2025 UWM Holdings Corp Earnings Call .
Speaker #3: 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 the earnings release that we issued this morning .
Speaker #3: Our commentary today will also include non-GAAP financial measures. For information on our non-GAAP metrics and the reconciliation between 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 #3: I will now turn the call over to Matt Ishbia , chairman , president and CEO of UWM Holdings Corp operation and United Wholesale Mortgage .
Speaker #4: Thanks , Blake , and thank you , everyone for joining . Over the past three plus years , we successfully navigated a higher rate environment with a focus on taking market share , showcasing that we are uniquely capable of both dominating purchase business and investing for the future .
Speaker #4: While most other lenders scaled back , we invested in our people , our technology and the broker channel , which are all operating at all time high levels .
Speaker #4: We've been prepared for a rate rally for years , and the third quarter gave us a little bit of a glimpse of what it would look like , and we delivered on everything we said we would .
Speaker #4: To give you a more tangible example , showcasing our capabilities , one day in September , we had an all time record lock day .
Speaker #4: We locked for point $8 billion . Yes , $4.8 billion of locks in one day . We handled it all in one day , along with the submissions that followed seamlessly .
Speaker #4: Now , that was only a three , four , five day window of opportunity , and we took advantage of it by handling all the volume all the way through our organization .
Speaker #4: From setup to submission to underwriting to closing to client service priorities . It all went pretty close to flawless . We maintained turn times , SLAs , world class Net promoter scores , and our submission to close times actually got even faster .
Speaker #4: From 12 days to 11 days , which are which are like record breaking numbers . It was phenomenal to see across the board the execution because we have been preparing for the for years .
Speaker #4: When you actually have to do it and execute , you never know how it's going to go . And it went amazing . The investments we have made in technology will continue to solidify our competitive advantage in the gap between us and our competitors , continues to widen .
Speaker #4: Back in May at UWM Holdings Corp , we made headlines using Mia , our most intelligent agent , a generative AI loan officer assistant .
Speaker #4: A lot of people were unsure of what this meant and how would it impact business , but we now have actual results . Mia has made over 400,000 calls on behalf of our mortgage brokers , helping them stay in touch with past clients .
Speaker #4: Remember , as I told you before , 97% of all borrowers love their experience with the broker and want to work with them in the future and have a great experience .
Speaker #4: But only 10% remember who the broker is when they want to refinance again . Mia is built to solve that issue , and she's doing it .
Speaker #4: She made over 400,000 calls , starting business conversations with borrowers on behalf of brokers . These were mostly the rate watch calls , and of these , over 14,000 have already closed .
Speaker #4: What's interesting is we forecasted a 10 to 15% answer rate . If we actually seen over 40% answer rate . Mia has been phenomenal .
Speaker #4: We've been saying from the beginning that our business is tied to AI , is based on three main issues enhancing knowledge , which chat does , along with a couple of other things we've done create efficiency , which bolt has done , and then the hardest one to solve is growth , which Mia is doing by solving the issue for brokers missing business from their past clients .
Speaker #4: So having over 14,000 closings from this in the last couple of months is even higher than we expected . When we rolled it out .
Speaker #4: By a wide margin . And that's why we are the biggest and best mortgage company in America . We have been for years and now we are just accelerating in widening the gap .
Speaker #4: Separately , Mia also answered about 70,000 inbound calls . Once again , this is actual AI working in our business , not just talking in buzzwords like a lot of other people like to do .
Speaker #4: She's taking messages , making appointments , helping them succeed . I love to see how many of our clients are utilizing Mia and having success .
Speaker #4: Now let's talk about the third quarter performance . We closed $41.7 billion of production . Obviously beating our guidance . It was our best quarter since 2021 , back when rates were in the two and a half to 3% range .
Speaker #4: We did 25.2 billion of purchases , which is on track to , as we said , is consistently doing about $100 billion of purchase every year .
Speaker #4: We have been doing that consistently at and then 16.5 billion of refi , which is up significantly . Like I said , we were able to take advantage of a very small window a couple of week window in there where we were able to execute and close loans fast , and we're excited to be able to prove that , that we can not only we were prepared , but we also executed our game .
Speaker #4: Margin was 130 basis points , which is slightly above the gain margin that we provided in guidance . And part of that is , you know , market moves in our direction .
Speaker #4: We were able to take advantage of that for that couple week window . Because of this window , you can see when rates drop , our volume goes up quickly .
Speaker #4: Our margin goes up quickly and we can really take advantage of it . And it's just 3 to 4 week window . Like I said , not dissimilar to what we saw last September .
Speaker #4: But we're even more prepared and we will take advantage of it in a bigger way this time last year , we had a similar 3 to 4 week window in the ten year , went to about 3.75 , maybe 3.80 , and we had a great month .
Speaker #4: We did about 17 billion , but we didn't have the success . We had this time because we have Mia . This time the rates didn't even get that low .
Speaker #4: The rates got to about four on the ten year , and it was about the same short window . Mia has helped us grow the business exponentially , and we're clearly prepared to handle that volume and more .
Speaker #4: Now , from an income perspective , we did over $12 million in income that's inclusive of $160 million decline of fair values . But really the number to focus on is over $211 million of adjusted EBITDA .
Speaker #4: Once again , a dominant performance from us . You've heard me say this on every call year after year , our playbook and recipe remain consistent .
Speaker #4: We will continue to invest in our people , our technology and dominate this industry with our service . And by growing the broker channel , our operating profile and relentless drive to deliver results , provides a consistent message for the investment community .
Speaker #4: UW is uniquely positioned to win in any market environment , and we are investing every day to further extend our lead for the benefit of the independent mortgage brokers and their consumers .
Speaker #4: I'll now turn the call over to our CFO , Rami Hasani .
Speaker #5: Thank you . Matt . Q3 was a strong quarter for us . We reported net income of 12.1 million and adjusted EBITDA of 211.1 million , up from both Q2 and Q1 of this year .
Speaker #5: Loan production volume of 41.7 billion , also up from Q2 and Q1 and gained margin of 130 basis points , again , up from Q2 and Q1 .
Speaker #5: Operationally , our business continues to deliver . We also continue to maintain a healthy MSR portfolio with net servicing income of 135.1 million .
Speaker #5: As we've said before , to support our growth , we continue to invest in our people , processes and innovative technologies to prepare us and our broker partners for long term growth .
Speaker #5: We remain on strategy with our investments , including our investments , to bring servicing in-house to be prepared for significant market opportunities for us and our broker partners going forward .
Speaker #5: We previously said that our business is positioned to handle twice the volume without interruptions or adding significant staffing or fixed costs . In Q3 , we demonstrated that as there were several periods throughout the quarter where production more than doubled and it was seamless from a liquidity perspective , we recently completed a successful offering of $1 billion in unsecured notes , with the proceeds received .
Speaker #5: We plan to pay off 800 million unsecured notes maturing in mid-November and will utilize the remainder to support our growth . We remain well capitalized with total equity of 1.5 billion and continue to be in a strong liquidity position , with total available liquidity of 3,000,000,002.2 billion .
Speaker #5: After paying off the bonds maturing in mid-November . While our liquidity and leverage ratios are slightly higher as of the end of Q3 , it was the result of the timing of our bond issuance in September and our proactive liability management with the use of proceeds prior to mid-November .
Speaker #5: Maturity . Net of available cash , our leverage ratio as of the end of Q3 remained largely consistent with the prior quarter , going forward , we expect to continue to maintain our capital , liquidity and leverage ratios within what we believe to be acceptable ranges in the current market conditions .
Speaker #5: In summary , Q3 was a great quarter with strong production and even stronger gain margin performance levels . We haven't seen in a while .
Speaker #5: We continue to invest in our people and technologies to be the most prepared mortgage company in the country . We also prepared from a capital and liquidity perspective and believe that we are well positioned for Q4 2026 and beyond .
Speaker #5: I will now turn things back over to our chairman , president and CEO , Mathew Ishbia , for closing remarks .
Speaker #4: Thanks , Rami . I'll close with a few points before our Q&A . Our work to bring servicing and House is on track for the first quarter of 2026 .
Speaker #4: This will have a positive financial impact on our business , and we are excited to bring our world class approach to servicing world .
Speaker #4: This will no doubt strengthen the consumer loyalty to their brokers . It was great to share more details on how partnership with built will deliver best service experience in the history of Mortgage , plus a tremendous amount of exclusive benefits for our brokers , including 4 to 500,000 leads , built renters that convert to purchase every single year exclusively to our mortgage brokers .
Speaker #4: We're also excited about the Mortgage Matchup Center sponsorship out in Phoenix. We've seen a significant spike in both traffic and success through the Mortgage Matchup.
Speaker #4: Dot com website . Since launching this . So very excited about all those things . Now I don't normally do this because I know you're going to ask me a bunch of questions , but before I move to guidance , you know , I'll ask you a question .
Speaker #4: When rates drop , what mortgage company do you believe is most prepared to handle it ? With AI , with operational , not with buzzwords , but with actual technology process and preparation ?
Speaker #4: That's already been proven . The ten year dip to four . And you saw what we did . I've been saying this for years .
Speaker #4: When the Ten-Year dips to 3.75 , we're going to double our business . No other lender can do that . Even if they could , where are they going to go from 4 billion to 8 billion ?
Speaker #4: We're going to go from 30 to 40 billion , a quarter to 60 to 80 billion in a quarter , right . With margin expansion .
Speaker #4: That's how IWM works . I hope you feel good about what lies ahead for us , because I do . All right . Now turning to guidance I expect the fourth quarter production to be between 43 and $50 billion of production .
Speaker #4: And we're going to raise our levels on the gain margin to 105 to 130 . Moving it up one level . And honestly , you know , if we get another dip like we just saw , those numbers could be even higher .
Speaker #4: But overall excited about what UW is doing . Going to continue to dominate . Thank you for your time today . Let's flip it over to the Q&A .
Speaker #2: Thank you . And at this time , ladies and gentlemen , if you would like to ask a question , I'd like to remind you that you need to press star , followed by the number one on your telephone keypad .
Speaker #2: And if at any point you would like to remove yourself from the queue , please press star followed by the number one and we'll pause for just a second to assemble our roster .
Speaker #2: Okay . And our first question for today comes from the line of Terry Ma with Barclays . Your line is live .
Speaker #6: Hey . Thank you . Good morning . I just wanted to follow up on the effort to bring servicing in-house and specifically with the built partnership .
Speaker #6: Maybe just talk about what you're seeking to accomplish with that partnership . How widespread the adoption could be , and then ultimately , like , who's going to fund the rewards issued from the build card ?
Speaker #7: Yeah . Thanks for the question . So the it's got nothing to do with the build card . So it's every mortgage payment that goes through .
Speaker #7: We are letting them be the front end servicing . You know app . If you think of it that way , the technology on the front end , the real benefit for us at UW is one , we're going to be better than every other servicer out there because we're better than everyone at everything we do .
Speaker #7: And servicing is a joke in our industry . And so we're going to make it really great for the client . When people call , we're going to actually answer the phone , not 43 minute waiting periods like everybody else does .
Speaker #7: So we'll be great on servicing from the service perspective for the consumer . So consumers will love it . And then they'll get rewards for making their mortgage payment , which is something that's never been done before .
Speaker #7: And then obviously the front end technology that it's your point about built will be fantastic . On top of that , as I mentioned , you know , built has you know , 5 million people making their rental payments through there .
Speaker #7: About 10% go and buy houses every year . Right now they just leave built and go buy a house . Now they're going to have a way to make a mortgage payment through built by working with a mortgage broker .
Speaker #7: So those turn into great leads and opportunities exclusive to our mortgage brokers . And so it's a win win win builds a great company .
Speaker #7: They do good things . But and our servicing process is going to be the best in class . That's how we do things .
Speaker #7: And so we're excited about that .
Speaker #6: Got it . Just just to follow up on the rewards piece . Like will that show up on expenses anywhere on your PNL .
Speaker #8: PNL ?
Speaker #7: No , that's a silly question , but no , it's not . It's not funded by . There's no expense for it at all .
Speaker #7: This is all upside .
Speaker #6: Okay , great . Thank you . And then maybe just to follow up on me , I appreciate the stats . I think you mentioned 14,000 loans off 400,000 outbound calls .
Speaker #6: Like any room for improvement, as we kind of go forward and you continue to kind of use it.
Speaker #7: Everything we do has room for improvement . So yes , Mia has been fantastic . It's been better than we expected . The answer rates are higher .
Speaker #7: The response has been better , but every day that goes by she gets better . And every day goes by . Our brokers get more and more comfortable .
Speaker #7: Consumers get more , more comfortable with AI agents reaching out . And it's not a human like every day . It's getting better and better , and it's only gonna be more and more loans .
Speaker #7: And so 14,000 was a really big number , surprisingly big number for us . But that's also the market . We had that little couple week blip where the market got really good , and we took advantage of that .
Speaker #7: But no , Mia has been fantastic . And I mean we spend all of our time in investments internally on AI and investments around AI .
Speaker #7: Once again , it's not a buzzword for us . It's actually producing business . And so Mia has been great and so I appreciate that question because she's she's been better than we expected .
Speaker #6: Okay . Great . Thank you .
Speaker #2: Thank you for your questions . Our next question is from the line of Eric Hagan with Btig . Your line is live .
Speaker #9: Hey thanks . Good morning guys . Good quarter on the guidance for the gain on sale margin . Is that a function of lower rates or is there another variable or condition in the market which is supporting that ?
Speaker #9: And how do you feel like the margin compares on Refis versus purchase loans at this point ?
Speaker #7: Yeah . So the margin on purchase and refis are there's no difference . It's not it's not a different thing . The the opportunity is if rates drop a little bit as rates get lower , more volume comes the market .
Speaker #7: And anyone that's a good mortgage loan officer or knows how to do business knows that rates are not what drives business . Because if that was the case , then there would be no retail business because everyone in retail charges 400 basis point gain on sale takes advantage of consumers .
Speaker #7: Does the wrong thing . If rates really mattered then there would be no retail channel since there is 70% of the market goes through .
Speaker #7: Retail rates are not the biggest thing . So margin being up 105 130 in that range , that's just as you know , for years we were at the low end .
Speaker #7: I always told you different levels , 75 to 100 was lower . And I keep I've kept moving it up strategically and timely .
Speaker #7: And I control that . Nobody else does . And so that's what's happening . And that's what it will be in that range again this month .
Speaker #7: And like I said on the volume and margin guidance is is accurate as it was last . But if you get if I get a two week blip , we are able to take advantage of it .
Speaker #7: And margins go up and volume goes up and we crush it just like we did this quarter . Although I don't know if you guys recognize it , but it was a dominant , dominant quarter .
Speaker #9: Yeah , we recognize it was good stuff , good color from you , as always . I mean , the origination numbers look really strong .
Speaker #9: But what was the driver of the conventional purchase loans being down a little bit quarter over quarter . And how much upside do you think there is to the purchase numbers ?
Speaker #9: If rates fall ? I think you mentioned 375 on the ten year . I mean , if that's the level , what is the upside to the purchase segment ?
Speaker #7: The the purchase business is the best part about our business . And you understand it pretty well . Eric , is that we're consistently dominant on the purchase .
Speaker #7: We do 25 billion a quarter , one , maybe 22 , maybe 27 , but basically we're 95 to $105 billion of purchase every year .
Speaker #7: Rates go down to 4% . Let's just play that out . To use an example , it crazy . Not the ten year , just the real rates .
Speaker #7: Yeah , our purchases will go up maybe 20 to 30% . It's not like a crazy difference . The real difference is the refi purchases are steady , steady , steady , consistent , always .
Speaker #7: And that's why nobody else has that . That's why everyone else is sitting here waiting . And they've been dying for the last four years .
Speaker #7: And we've been consistent with purchase . So the real upside is in the refi business that will go up , you know , like we saw it can double or triple in a , in a in a week or a day .
Speaker #7: And so the purchase business , especially in , fourth quarter . First quarter purchase business , as you know , is that's not the purchase season .
Speaker #7: Purchase season is second and third quarter . And really the summer because that's when people are moving and all that stuff . And so it will be steady .
Speaker #7: It'll be consistent . You know yes , there's plus 25 maybe plus 30 , maybe plus 40% volume on purchases with lower rates because maybe some more people sell their houses .
Speaker #7: And you can give me all that stuff . Affordability gets better , but people got to go out and buy houses still . So I'm not that focused on like we will dominate the purchase market no matter what happens .
Speaker #7: And then the refi is where the upside comes in .
Speaker #10: Yep .
Speaker #9: Appreciate you guys . Go Suns .
Speaker #11: Thank you thank you .
Speaker #2: Thank you for your questions . Our next question is from the line of Bose George with KBW . Your line is live .
Speaker #12: Hey good morning . Can you talk about the volume and margin trends that you've seen so far in October . Is that kind of at the midpoint of the guidance range ?
Speaker #7: Yeah . You know , like I guided for to where I did for a reason . October was a great month and the volume and margins are aligned now .
Speaker #7: November is a , you know , 19 business day month . And if you take out the Wednesday and Friday after Thanksgiving and before , things , really a 17 business day month .
Speaker #7: So it's a really short month . So this this quarter is actually a short quarter tied to the end of the year stuff .
Speaker #7: But I've just guided that no matter what , I'm going to have the best quarter we've had in four years . Maybe you guys will recognize that .
Speaker #7: And and realize that we're dominating out here . But either way , 43 to 50 billion is very good . It's never been hasn't been done in four years at UW .
Speaker #7: The margins are guided to those same places that I just did . And so we will not miss guidance . Just as I never have .
Speaker #7: I think as long as I've been doing this . .
Speaker #12: Okay , great . Thanks . And then actually on the servicing side , you noted that you'd be bringing it in-house early . 26 .
Speaker #12: Does that happen ? Is it staggered ? Does it come in over time or , you know , how does that how's that going to work ?
Speaker #7: Yeah . All new loans that close in 2026 will be will stay here . So we won't subservice those out . To your point to your question .
Speaker #7: And then the loans that are currently subservice out at Sandler over the year will transition them here . So by the end of 2026 , there won't be loans anywhere else outside of default loans and different things that we make decisions on .
Speaker #7: But for the most part , everything will be here internally . Whether I move a big chunk of them in March or April , another chunk in September , October .
Speaker #7: But all new originations are 2026 and by the end of 2026 , 100% of the servicing book will be internal . Like I said , outside of the loans that I've chosen to not come in town or come in-house .
Speaker #12: Okay , okay , great . Thanks .
Speaker #2: Thanks for your questions. Our next question is from the line of Doug Harter with UBS. Your line is live.
Speaker #13: Thanks , Matt . As we think about your ability to ramp up volumes , how you've talked about the scale of the business , how should we think about , like , what are the incremental costs that , you know , for , for funding , funding that new volume and just how to think about the the operating leverage that's in the business ?
Speaker #7: Yeah , the operating leverage in the business is is substantial right now . So there's , you know , the cost . I know you guys look at cost all the time .
Speaker #7: A lot of them are investments. You look at, like, how do we invest in technology? How do I continue to invest in everything that we do?
Speaker #7: The broker channel is all the different pieces to it. But where we're at right now, I don't need to add costs to double my business.
Speaker #7: I've said that before and so therefore you can kind of think of the cost like obviously when you do more volume , there's more commissions that get paid out and there's things like that , but that's the that's a , that's a variable cost from a fixed perspective , I feel really good about where we are right now .
Speaker #7: And I'd expect over the next year that to stay the same or stay in that range plus or minus 10% . And probably be on the lower end , -10% is how I think about it .
Speaker #7: Based on just the AI initiatives and things that we've done . But the same time , if there's an opportunity for you to make an investment to build the business and dominate , we will do that without question , without thought .
Speaker #7: And so the investments we make will continue . But the expenses , like if you're looking like fixed costs , like how much more we don't need anything to do the volumes .
Speaker #7: I just told you guys we don't need anything .
Speaker #13: And then speaking of investment , can you just remind us on the bringing the servicing in-house ? I guess have those investments already started .
Speaker #13: So like , are those costs kind of already in , in your cost base ? And you know just how to how to think about , you know , kind of the cost side as , as servicing comes in house .
Speaker #7: Yeah . Those costs . So I'm getting double hit on it . Right . Because I paying some servicers and I'm also building out a servicing portfolio and servicing people , hiring people to build the to build out the way I want to do it .
Speaker #7: I told you guys originally I'd say between 40 and $100 million . I think maybe I said 60 to 100 , probably closer to the high end of these ranges I'm giving you .
Speaker #7: But let's call it 40 to $100 million to bring servicing in-house . And those numbers are accurate . You won't see that all the way through the income until 2027 .
Speaker #7: Right . Because I'm this year is the worst because I'm double dipping . I'm hiring people , building it out . And I'm still self-servicing next year is a combo of it .
Speaker #7: In 2027 , I'll have all the savings baked into our business , along with the leads , along with the growth along with the the success .
Speaker #7: So along with better retention , all the things that come from it . So yeah . So you're correct . There's those costs are already in there .
Speaker #7: And same thing with the technology investments right now building out some of those things from the AI perspective to make servicing . Like I said , the best in the country .
Speaker #7: I'm not trying to be like all these other guys .
Speaker #13: Great . I appreciate the those answers , Matt . Thank you .
Speaker #2: Thanks for your question . Our next line , our next question is from the line of Jeff Adelson with Morgan Stanley . Your line is live .
Speaker #14: Hey , good morning guys . Thanks for taking my questions , Matt . Just maybe quick reminder of the hedging . I think this quarter , the the hedge gain against the MSR loss was a little bit smaller than we saw last quarter .
Speaker #14: Just maybe just a quick update on on the hedging strategy . I know you've been a little bit more opportunistic . There . Thanks .
Speaker #7: Yeah . No , I appreciate it . We don't hedge our MSR as you're hopefully aware of . You know , I do look at opportunities and look at interest rates and make decisions .
Speaker #7: Sometimes we do more of it . Sometimes we do less of it . This quarter we focused less on it because we focused on just the dominant dominating the business .
Speaker #7: Obviously , the ten year goes up and down the MBS , the rates go up and down and how it finishes , you know , depending on how it you know , how it started .
Speaker #7: It ties to an MSR loss . Anyone and I know it's you guys because I love all of you guys . But anyone that focuses on MSR and the fair value just doesn't understand mortgages .
Speaker #7: It doesn't understand this business . It's got zero to do with what I'm doing . The operating of the business , the ten year can literally be at 3.75 for this whole quarter .
Speaker #7: Let's say it drops to 375 today . I'm going to crush it . Just crush it across the board . I'll call you next quarter .
Speaker #7: I'll say , hey , we did 60 billion , 70,000,000,135 basis points of margin . We'll crush it . But the on on December 31st , the ten year goes back up to 440 .
Speaker #7: Just use some crazy number and I'll have an MSR write up of another $400 million . Also , that had zero to do with my business in the inverse is is accurate too .
Speaker #7: So the MSR value stuff means nothing . I don't focus on it . I don't care about it . I'm not going to care about it because it's like , why would I focus on .
Speaker #7: I have zero control over zero . Oh , you can hedge it . Matt . Well , that that once again , MSR value that'd be putting costs out there to hedge something that I have zero control over .
Speaker #7: I don't care about the MSR values . If you guys write about MSR values , you don't understand my business . It just doesn't matter .
Speaker #7: It matters zero . So just like by the way , and you can go back and listen to the recordings , I told you the same stuff when my I got an MSR write up of 500 million .
Speaker #7: I'm like , don't give me credit for that . I didn't do anything for that . That means zero . Watch my core business , watch what I do with my production .
Speaker #7: My gain on sale , my expenses , and how we dominate in there , and our adjusted EBITDA of 200 plus million . Like that's how you run a business .
Speaker #7: That's how we focus on I don't focus on the other stuff . I know other people like to talk about it because they just don't understand our business .
Speaker #14: And then just in terms of Mia , it was good to hear the caller on the success so far . There . Just as I sort of think about that , 14,000 transactions close , do you think about that as mostly refi at this point ?
Speaker #14: And , you know , some really rough math ? If I sort of think about an average loan size here would suggest there was somewhere in the ballpark of maybe like 10% of your originations this quarter .
Speaker #14: And if most of it was refi , that would be quite a bit of refi as well . So is that right ? Or how should we be thinking about those numbers in the path from here .
Speaker #7: Yeah . To be and to be clear , maybe I should have done a better job of stating it . The 14,000 probably includes loans that have closed in the in the beginning of October , because I think I pulled the data like two weeks ago .
Speaker #7: So it's probably a little run off . So it's not all 14,000 in the first quarter . In the second quarter , third quarter .
Speaker #7: And it also was probably a little bit in the second quarter . So it's not like pure . But we really saw a massive pickup in that September little blip that we just talked about .
Speaker #7: So a lot of that stuff closed in September and a little bit rolled to October . With that being said , I would assume that it's all refinance 95% of its refi .
Speaker #7: Yes , there are some that Mia calls and they're like , oh , I'm looking to buy a house or I want a second home .
Speaker #7: But the focus on the 400,000 plus calls were rate watch calls , which basically means , hey , you might be in the market for a refinance , you should be in the market for refinance .
Speaker #7: I've got good news . You're low at this company . And so maybe at some point we'll play the call for you , call our investor relations team .
Speaker #7: They'll let you hear a call like the real live calls of people like , yeah , I have Johnny call me . And then that turns into an import which turns into a loan , which turns into a closing .
Speaker #7: And so I would say 95% refi in the data I just gave you on the 14,000 . But I wouldn't try to put it in the third quarter number because it's not all in the third quarter .
Speaker #7: I would say , you know , a good amount of it was in the third quarter , but some of it trickled into the fourth quarter , and we'll have more in the fourth quarter .
Speaker #7: I already have some since I pulled that data .
Speaker #14: Okay . That's helpful . So so pretty good number though . But appreciate the call . Thanks .
Speaker #2: Thanks for your question , ladies and gentlemen . Once again , if you would like to ask a question today , remember it is star followed by the number one on your telephone keypad .
Speaker #2: Thank you . Our next question is from the line of Mikael Goberman with citizens . Your line is live .
Speaker #15: Hey good morning Matt . Hope you're doing well . Just a quick question about big picture . Question about technology and how it's affecting the industry , especially with respect to refi .
Speaker #15: There's been a lot of talk about the sort of traditional 75 basis point incentive for Refis really contracting to to much lower level going forward , maybe even as low as 25 , 30 .
Speaker #15: Could you talk about that ? And and how technology and specifically AI is affecting that ? Thank you .
Speaker #7: Yeah . Just to clarify your your question . So I understand so I can give you the right answer . You're saying that people are more likely to refinance because it's easier these days .
Speaker #7: They used to think you had to save more money . Now they're willing to do it quicker . Is that what you're asking ?
Speaker #15: Correct . Yeah . Given that sort of the the human element has always been the choke point in the refi experience and technology .
Speaker #15: Just collapsing that into a faster process .
Speaker #7: Yeah . I mean , I , I see that and I guess your point is will there be since there's less cost , less friction , and it's easier to refinance because of what will there be more refinances and I guess I would say , yes , I see the opportunities there .
Speaker #7: But but you're also assuming that all lenders are actually good at it . You know , you're also assuming that other lenders actually have technology .
Speaker #7: The friction is still a pain in the butt for most . I mean , I think I said 11 days of the CTC and I've realized it's even faster than that .
Speaker #7: The industry average are still 40 days . There's still a lot of friction . People are still literally you get a mortgage with some of these retail lenders or some of these other lenders .
Speaker #7: You're literally going and printing out your 12-month bank statement, going and getting your pay stubs, calling your attorney, your tax people, and getting your tax returns and sending them up like it's a complete joke.
Speaker #7: Still . So don't don't get confused that just because we're dominating and doing these things and that a couple other companies are focused on AI , a lot of AI is buzzwords and bullshit right now .
Speaker #7: The truth is , we're closing . Like , why don't you check their data , see who's actually pulling the friction out ? But you are correct .
Speaker #7: When you make it faster , easier and cheaper , people are willing to do it because it's like , oh , it's not a pain in the butt to refinance .
Speaker #7: I'll take $92 of savings . I don't need to wait for $200 of savings . In the old days , it was like , let me wait till 200 hours because it's not worth my time .
Speaker #7: I don't want to go get my pay stubs and go to Kinko's and make copies and all that nonsense , but there are still lenders and the majority of lenders are still doing it the old way .
Speaker #7: So I wouldn't say there's a massive change . You'll see our go faster from the opportunity because we'll be able to help people , but it's still it's not going to be a massive change in the markets .
Speaker #7: Yet in the future, it will be. I think you're actually onto something, but you're still the technology that I speak of.
Speaker #7: And we talk about an AI is , I say light years , but we'll call it 3 to 5 years ahead of all these other people .
Speaker #7: And so , yes , there'll be more refinances , but with our servicing , bring it in-house with our faster , easier process with mortgage brokers being cheaper and lower costs , it's going to be more refis .
Speaker #7: And that's why we dominated in September . And we dominated in October . And will dominate this fourth quarter with continue with with the volume on Refis .
Speaker #7: And we don't have to own the servicing book , as a lot of people like to say , if they own servicing book , they get the Refis .
Speaker #7: That ain't the game anymore . Although people are spending billions and billions of dollars buying , servicing books , that helps . And it gives you a little bit of a leg up , a little inside track , but that is not driving it .
Speaker #7: As you saw . I think I said last quarter that we own 2% of the servicing book , or 3% of the book , and we did 11 or 12% of the refis in the market .
Speaker #7: So obviously that's not the game anymore . So taking the friction out is the game . Technology , the game . And that's why you see me making investments every single day to be prepared to dominate , just like we did in the third quarter .
Speaker #7: And I will again in the fourth quarter . And then in 2026 .
Speaker #15: That's great color . Thank you very much .
Speaker #7: Thank you .
Speaker #2: Thanks for your questions , ladies and gentlemen . That will conclude our Q&A portion for today . I would like to turn the call back over to Mathew Ishbia for any closing comments .
Speaker #7: Yeah , thanks for the time today , guys . Appreciate you guys . Have a good day .
