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United Wholesale Mortgage plunges 40%; suspends dividend, raises capital
cnbc.com • • business
Key Points:
- Shares of UWM Holdings, parent of United Wholesale Mortgage, dropped 40% after the company suspended its dividend and raised $2.05 billion in new equity from Oaktree Capital Management and CEO Mat Ishbia's family investment vehicle.
- UWM's financial position weakened in the latest quarter, with total equity falling from $1.6 billion to about $1 billion and liquidity at approximately $1.3 billion, prompting the company to take measures to preserve capital.
- The mortgage lender reported a $451.9 million loss on $888 million revenue in Q2, reversing a profit in the previous quarter and the prior year, amid a challenging environment of rising Treasury yields and elevated mortgage rates.
- Mortgage originations declined to $39.7 billion in Q2 from $44.9 billion in Q1 but remained roughly flat year-over-year, reflecting subdued demand in the housing market.
- CEO Mat Ishbia stated the actions aim to strengthen UWM’s liquidity and position the company for long-term success despite ongoing market difficulties.
