Similar to how Rocket Mortgage overtook Wells Fargo, United Wholesale Mortgage (UWM) has now risen above Rocket to become the nation’s top mortgage lender overall.
During the third quarter, the Pontiac, Michigan-based wholesale lender originated some $33.5 billion in home loans, up from $29.9 billion in the second quarter.
While it was a big year-over-year decline from $63 billion in the third quarter, it was still enough to claim the top spot.
It’s even more impressive given the fact that UWM works solely with mortgage brokers via the wholesale lending channel.
They don’t operate in the retail, consumer-facing space, which also tells you mortgage brokers are back in a major way.
How UWM Unseated Rocket Mortgage to Take #1 Spot
UWM, which refers to itself as the historic #1 wholesale and #1 purchase mortgage originator in America, finally took the top spot for total origination volume.
As noted, their $33.5 billion funded in the third quarter of 2022 was more than enough to unseat Detroit-based Rocket’s $25.6 billion.
In fact, their loan volume was nearly 31% higher than Rocket’s during the three months ended September 30th, 2022.
It was also much higher than former #1 Wells Fargo, which mustered just $21.5 billion during the quarter, with nearly half of their volume coming via the correspondent channel.
Meanwhile, Chase only managed $15.2 billion, illustrating the big banks diminishing share of the total mortgage market.
How UWM was able to originate so much more than other mortgage companies could be attributed to their “Game On” pricing initiative launched in late June.
It was an expansion of the lender’s “Compete & Beat program,” which promised to beat the top 20 lenders’ pricing by a single basis point.
But this time, by dropping rates by 50 to 100 bps (.50%-1%) on all loans. It appeared to be sufficient to gain even more market share, especially in a rising mortgage rate environment.
Of course, this means making less per loan to boost volume, something their competitors might not be interested in.
UWM’s Goal Was to Be #1 Overall by 2024
UWM CEO Mat Ishbia said in a press release the company’s goal was to be the #1 overall mortgage lender in the nation by 2024.
This was back in June 2021, meaning it took just 17 months for the company to make good on their promise.
When Ishbia became president of UWM in 2009, they were the 75th ranked wholesaler in the country, and not even in the top 150 overall.
By 2015, UWM became the top wholesale lender in the nation, a ranking it has held ever since.
But they were still second to Rocket overall, and actually third behind Wells Fargo in 2021, funding just $227 billion compared to Rocket’s $343 billion.
However, they’ve now at least got a quarter under their belt in the top spot, and the next goal will likely be winning an entire year.
In terms of product composition, UWM funded about $28 billion in home purchase loans and about $6 billion in mortgage refinances.
Purchase loans consisted of $19.2 billion in conventional loan volume, $7.6 billion in government loan volume (FHA/VA), and nearly a billion in jumbo loans.
On the refi front, about $4 billion was conventional, $1.6 billion was government, and $195 million was jumbo.
So far in 2022, the company has funded about $102.2 billion, which is markedly lower than its 2021 total.
This is indicative of mortgage rates that are closer to 7% than the 3% seen a year earlier.
Meanwhile, Rocket Mortgage has funded $114.1 billion thus far, meaning it will take a big effort in the fourth quarter for UWM to go top for all of 2022.
But it is potentially in reach if UWM’s fourth quarter mirrors its third quarter. Stay tuned.