UWM(UWMC) 2026년 3분기 실적 발표 컨퍼런스 콜: 334억 달러 실적 및 2027년 비용 목표

핵심 요약

• UWM은 2026년 3분기에 100억 달러 이상의 재융자 실적을 포함해 총 334억 달러의 주택담보대출 실행액을 기록했다고 발표했습니다.
• 이전 AI 및 기술 투자에 따른 효과가 반영되면서 분기 비용은 전 분기 대비 약 5,800만 달러에서 5,900만 달러 감소했습니다.
• 경영진은 대출 실행액, 이자 비용 및 기타 변동비에 따라 달라질 수 있으나 2027년의 합리적인 비용 목표치로 약 21억 달러를 제시했습니다.
• UWM은 2026년 동안 70만 건의 대출을 자체 서비싱 플랫폼으로 이관했습니다. 경영진은 2027년에도 최적화가 지속됨에 따라 추가적인 비용 절감과 서비스 개선이 이루어질 것으로 기대하고 있습니다.
• 경영진은 현재 레버리지가 약 1.7배에서 1.8배 수준이며, 연말까지 1.5배 미만으로 낮아지고 금리 및 시장 상황에 따라 1.2배에서 1.3배까지 낮아질 가능성이 있다고 밝혔습니다.
• UWM은 유동성을 유지하면서 레버리지를 축소하고 옥트리 파이낸싱을 관리하기 위해 수익, MSR 매각 대금 및 기타 이용 가능한 자본을 활용할 계획입니다.

주요 재무 데이터

사업 및 영업 실적

UWM은 비용 기반이 낮아진 원인을 지난 수년간 진행된 AI 및 기술 투자 덕분으로 보았습니다. 경영진은 이러한 도구들이 직원 생산성을 향상시키고 비용을 절감하며, 고정비의 상응하는 증가 없이 더 많은 대출을 처리할 수 있도록 회사의 역량을 확장하고 있다고 밝혔습니다.

회사는 주요 AI 이니셔티브로 ChatUWM, 미아(Mia), 자동 소득 산정 기능 등을 꼽았습니다. 경영진은 또한 TRAC+가 매출을 창출하고 소비자 비용을 낮추며 재융자 대출 시장에서 UWM의 경쟁력을 뒷받침하고 있다고 덧붙였습니다.

UWM은 경영진이 밝힌 바와 같이 업계 서비싱 잔액의 약 2%만 보유하고 있음에도 전체 재융자의 약 13%를 공급하며 100억 달러 이상의 재융자 실적을 올렸습니다. 회사는 신규 주택 구입용 대출에 집중하고 있으나 시장 상황이 호전될 경우 재융자 활동이 크게 증가할 것으로 전망합니다.

서비싱 이관 작업은 주요 효율화 이니셔티브로 유지되고 있습니다. UWM은 2026년 동안 70만 건의 대출을 자체 시스템으로 이관하는 동시에 신규 대출 건에 대한 이관도 지속했습니다. 경영진은 다음 단계에서 최적화, 서비싱 비용 절감, 서비스 수준 향상 및 차주 유지율 개선에 초점을 맞출 것으로 기대합니다.

UWM은 주택담보대출 서비싱 권리(MSR)를 경상 자산이자 유동성 공급원으로 지속적으로 간주하고 있습니다. 경영진은 신규 대출 실행을 통해 서비싱 포트폴리오를 재충전하는 한편, 리스크와 레버리지를 낮추기 위해 기회주의적으로 MSR을 매각할 수 있다고 설명했습니다.

경영진 가이던스

경영진은 약 21억 달러가 2027년의 합리적인 비용 목표가 될 것으로 예상하고 있습니다. 다만 대출 실행액이 크게 증가해 이자 비용과 기타 변동비가 늘어날 경우 실제 비용은 더 높아질 수 있습니다.

2026년 4분기의 경우, 경영진은 매각 이익 실적이 실적 발표회에서 언급된 범위 내에서 전반적으로 안정적으로 유지될 것으로 예상합니다. 또한 4분기와 1분기가 전통적으로 주택담보대출 활동이 저조한 시기라는 점을 언급하며, 현재 시장 여건상 분기 대출 실행액이 400억 달러에서 600억 달러에 달하기는 어려울 것이라고 주의를 당부했습니다.

경영진은 연말까지 레버리지가 1.5배 미만으로 하락할 것으로 예상하고 있으며, 금리와 전반적인 시장 여건에 따라 1.2배에서 1.3배 수준도 가능할 수 있다고 언급했습니다.

UWM은 높은 조달 비용으로 인해 옥트리 파이낸싱 상환에 우선순위를 둘 계획이며, 유동성과 레버리지를 지속적으로 관리하는 동시에 향후 수익을 상환 재원으로 활용할 예정입니다. 경영진은 구체적인 상환 일정을 제시하지 않았으며, 시장 여건과 수익 창출 상황에 따라 2년에서 4년이 소요될 수 있다고 설명했습니다.

리스크 및 관전 포인트

경영진은 고금리와 4분기 및 1분기의 계절적 약세 등 주택담보대출 시장의 지속적인 역풍을 거듭 지적했습니다.

MSR 평가 및 헤징은 여전히 수익 변동성의 중요한 원인으로 작용하고 있습니다. UWM은 완전 헤지를 하지 않은 상태이며 분기마다 헤지 포지션을 평가합니다. 경영진은 금리 하락 시 대출 실행 증가가 회사가 선호하는 자연 헤지라고 설명하면서도, UWM이 아직 이 방식에만 의존하는 수준으로 되돌아가지는 않았다고 밝혔습니다.

대규모 MSR 거래에는 유동성 할인이 적용될 수 있습니다. 경영진은 매수자 기반을 다변화하고 장부가에 가까운 가격을 달성하기 위해 2027년에 더 작은 규모의 매각을 추진할 수 있다고 말했습니다.

옥트리 자금은 비용 부담이 커 상환이 우선 과제입니다. 다만 경영진은 상환 시점이 향후 수익성, 금리 및 주택담보대출 시장 여건에 따라 결정될 것임을 강조했습니다.

애널리스트 Q&A 주요 내용

애널리스트들은 MSR 매각, 레버리지 축소, 서비싱 전략, 헤징 및 자본 배분에 주목했습니다. 경영진은 MSR 매각이 전략 변경을 의미하는 것은 아니라며, UWM은 대출 신규 실행을 통해 서비싱 포트폴리오를 계속 성장시키는 한편 유동성 개선이나 레버리지 축소에 도움이 될 때 자산을 매각할 것이라고 설명했습니다.

UWM은 이전에 약 4,000억 달러에서 5,000억 달러 규모의 장기 서비싱 포트폴리오 목표를 논의한 바 있습니다. 경영진은 해당 범위를 잠재적 최대치로 재확인했으나 구체적인 시한을 제시하지는 않았으며, 포트폴리오 성과 기회주의적 매각 사이의 유연성을 강조했습니다.

자본 배분 측면에서 UWM은 MSR 신용 한도 상환, 채권 매입 가능성, 이자 비용 절감, AI 투자 및 보통주 자사주 매입 가능성을 검토하고 있습니다. 경영진은 상당한 현금과 유동성을 유지하는 것이 경쟁적 관점에서 계속 우선순위라고 밝혔습니다.

서비싱 헤지와 관련해 경영진은 UWM이 옥트리의 자문을 바탕으로 최고투자책임자(CIO), CFO 및 이사회의 감독하에 더 선별적인 방식을 적용하고 있다고 말했습니다. 회사는 MSR 포트폴리오 규모의 변화에 따라 분기별로 헤지 수준을 계속 검토할 예정입니다.

실적 발표 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Mathew Ishbia

Appreciate everyone joining the call. We've got a lot of questions from everybody. So we will go through that process and answer. And also this time, I think some live questions will be handled to end. If you raise your hand, and they'll open it up for you to ask a live question if I don't cover it prior to that. With that being said, thank you for joining.

Overall, we feel like third quarter was a great quarter for UWM. The mortgage market, obviously, as you guys all understand, it has a very tough backdrop for years now, 5-plus years, but we feel great about where we're at at UWM from a business perspective, operating and obviously, from a cash and capital perspective now as well. However, with all the great things going on, there's still a lot of headwinds in our industry and we feel really good that we're not only prepared to handle but prepared to grow into them and do very well.

So overall, the quarter was very good across the board, $33.4 billion. I'm not going to go through and read all the stuff you guys saw the release, $33.4 billion of volume. Obviously very profitable this quarter, and we expect to continue to win. The big thing that I know people talk about is expenses, our expenses were down substantially. But those are really just tied to the investments we've made in AI and technology over the last couple of years whenever we thought our expenses were higher. And so we're trying to see the fruits of the labor or the benefits of that as we have gone through it. And so we feel really good about the business. The operating business is very, very strong. It always has been strong. And obviously, recently, the partnership with Oaktree has now substantiated our capital structure, along with our liquidity and we feel like we're in a really, really strong position to not only continue to win in this market, but be prepared for all markets, better or worse going forward, and we are ready for that.

And so we feel good about it. And the one last comment is I think that the mortgage market is in the last 5 years, is showing a lot of work on a lot of different companies, a lot of different things. Everyone has got some issues, some hole. Our whole was solved with an opportunity with someone writing a check and with me and Oaktree partnering to do that, where a lot of other people's are operating [ holes ] where they don't have enough business. They don't have enough opportunity to get loans. They can't keep out production. They can't invest in AI. And so all of those things, we feel really good. I don't like to have any holes or any issues. But overall, we feel like if we're going to pick one potential issue, we were able to solve that and now will be forward stronger than ever.

With that being said, there's so many questions. And so I'll try to answer a handful. And I think a lot [indiscernible] combine into the same question because I think a lot of you asked the same question maybe with different wording. So I'm going to try to read out the questions and go through this. And then once again, by the way, we added some people and done some different things. If there's a different -- next quarter, we might look at it a little different format. If you guys like something different, you don't like. Please share with Blake Kolo and our team on what we can do better. to make this format valuable to you guys next quarter and beyond.

So we're looking at making some modification, but we feel good about this, and I'm looking forward to answering all these questions. So all right. Let's jump into it.

First question I have here Mikel Goberman, Citizens, Jason Stewart, Jeff, Bunch of you asked the same question. So why did UWM sell a significant amount of MSRs. So first off, you're speaking of the fourth quarter, first of all, I don't really look at it as that significant amount. I think for the year of 2026 we end up selling like $135 million, $140 billion-ish. And I think in 2025, we sold $180 billion.

So we actually sold less than our production will be this year. So not as significant. We just did a lot in the fourth quarter. But I do think it's a great opportunistic thing for UWM. I'm big on derisking, deleveraging. It creates cash. It helps us in a lot of different respects. And so we're always looking at that opportunity. And so -- and we'll look at it again more this quarter or next quarter or whenever the opportunity is there. And so I do look at it. But the thing about UWM is we do so many loans that we can refill it really quickly.

So I don't even look at that is that big of a pool of loans to sell. I know it is in the big scheme of things. But for us, we originate a lot of loans and we'll be able to replenish that right back in and then still be opportunistic to derisk and deleverage the company at all times. So that's kind of how I look at it on the MSR side for the fourth quarter.

All right. Second question, Ryan Nash, Goldman. How are you thinking about the trajectory of expense growth into the fourth quarter? And can you approach $2.1 billion of costs in 2027 versus $2.3 billion run rate in the third quarter?

So my answer to that is, yes, we can, and I expect us to do that. We manage expenses and as I talked about before, it's very important that we utilize AI and utilize some of the investments we made in the past that are starting to show the benefits. And so the expenses being down, whatever it was $58 million $59 million quarter-over-quarter was obviously a great sign, and I expect that to continue as in maintaining this level. The only comment I'll make is some of those expenses can be variable. So if we double our business, which we still have the capacity of doing. So everyone else is cutting expenses and they can't actually do more loans. But because of our AI investment, because of our scale and our size, we actually can do double the loans and still have take advantage of that opportunity, whether it comes tomorrow, next year or in 3 years, we're ready for it. So we can handle that while still managing our expenses in a positive way. And so I expect the $2.1 billion is a good target. And if we do a lot more loans and our interest expense goes up and our variable costs go up substantially, then I think we'll all be happy because that means we made a lot more money and did a lot of good things.

But expenses are in a good spot. And I actually believe they were in a good spot prior. However, the investments were just big. And one other comment I'll make on these investments in AI is everyone's got to do it. And so if I make a $35 million AI investment, we'll -- that needs to be done to survive and win and thrive in 2027, '29, '31, '32 and beyond. And we can do it and spread it over a lot of loans. And there are any other companies that can do it at that level. A couple of others are close to our size that can do that.

But the truth is, most companies have to make the investment and it's going to hammer them because of the cost. And so we feel good about our expenses. We feel good about our investments, and we're going to continue going forward, and 2.1 is a good target. I think that's a fair estimate, whether we exactly hit it, plus or minus we'll see, but I think the trend seems right. One last comment on those, so sorry, servicing expense is a big part of it as well. Bringing servicing in-house will help and will continue this year, we kind of got a double hit. We had outsourced and in-sourced and so we kind of had double hit. So I think that we have opportunity to get lower. Thank you for the question.

Bose George. Leverage -- what leverage levels are you targeting? So I guess what I'll say on leverage, I think being below 2 is an important metric for us. But I think we're 1.7, 1.8 right now. But I think below 2 is a good target. But we would like to -- we're focused on China around 1.5 or less. And so I think that's the focus. I think by the end of the year, actually, I think it will be like 1.2, 1.3, maybe even a little bit less depending on interest rates and market and all these things. But I expect this to be below 1.5 by the end of the year. And I think being in the 1.5 to 2 range is a strong spot, and below 1.5 is excellent, and I feel great about where we're at on that and focused on some of that ties to MSR stuff as I've already mentioned, about deleveraging and derisking a little bit. Thank you for the question.

Mikel Goberman, Citizens, how did UWM generate more than $10 billion of refinance volume? Well, we're the best in the country at that, right? We're the best origination machine in America. Our brokers have best origination machine in America. We dominate on the purchase side, but also on the refinance side, too. So a lot of people have this myth that you have to own all the servicing to do the refinances. Yes, only the servicing gives you a little better chance. But if you're the best at the country, what you do, brokers are great. We're great at it. We get a lot of business. I think the stat that someone showed me maybe a quarter ago or it was like we own 2% of the servicing, but we do 13% of the refinances, which means we're very efficient and we can handle things from a positive way of getting these loans done fast and helping brokers and helping consumers take advantage of a refinance, whether it's cash out or whatever it may be.

And so we feel good about it. We also have some products that people don't have, TRAC+, which is starting to drive some revenue, but more importantly is cost savings to consumers. Actually, the FHFA director in the Vegas came out and are pacing trying to mandate that people start using some of these title things that we've been doing for years. And so we've already have built out this infrastructure, it's a revenue generator, it's a cost savings, and it's a competitive advantage for our brokers. And so that does help us on the refinance market as well, whether it's a government or a conventional loan.

So we feel good about that. So refinanced volume is very strong. I focus on the purchase business because the refinanced volume is going to go 4x when the opportunity comes. But right now, I focus on being consistent with purchases. We're the best in the country at that. We will continue to focus on purchases. Thank you for the question.

Let's see Jason Stewart, I guess, once you asked this question. So our technology and AI savings sustainable? Yes, absolutely, they're sustainable. The investments we made to help us save money. It's helping our people do more. It's helping us move things around in a positive way to help us cut costs. And it's not only sustainable, but I think it's the beginning of where we're going. And when I say that, that is cost savings is great. And of course, we're focused on it, and you can see those numbers, and you've seen the results, then be talking about it, you can see it. But let's put that aside.

Also growth opportunity, how much is AI can help us do more loans, help our brokers win more business, help our brokers recruit more loan [ options ], how is AI going to transform the business. And those are some of the investments we made that you're going to be able to see the benefits of it. Some of them are coming out, and we're doing a lot of business. You've seen Mia, you've seen some stuff we've got the income calculated we've built. And we've got some cool things. ChatUWM has been really powerful. And so we have some really big AI initiatives that have really impacted the business, which also is helping with things with [indiscernible] and success track and training and growth. And so AI can definitely help you cut costs and expenses, and you're seeing some of that benefit, but you got to make a massive investment in it to do that. And then you also got to see -- can help you do more loans, help you grow your business, drive the top line revenue as well, and we feel really good about that and the things we've done in the past and we're continuing to do right now. Thank you for the question on that as well.

Let's see Jeff Adelson, how are you responding to defend market share, in particular, [ ROCCAT ] announced 200 brokers representing $12 billion from your potential volume. From your perspective, it's holding market share pricing -- so first off, [ rocket ] means zero to me, they just make numbers up. None of that is true. But either way, they can say what they want to say, they if you remember back, they said, all in, it was a great thing for them. And obviously, we understand what's happened with that because brokers are winning. The nice part about this statement is the [ rocket's ] trying to do whoever they can to try to get involved and they're not getting any business. They're not growing any broker market share, and they're not going to -- because all the brokers work with UWM.

But more importantly, because they're not helping to partner with brokers and do things the right way. So I'm going to talk about what [ Rocket ] does, but what I will say is I do like about what Rocket is doing is they realize along with everybody in this market realized the brokers are the place to win. The brokers do the purchase business, the brokers are the growing channel. The brokers are the winners right now. And so they're going to continue the time by I think talking above 5, 6 years, if you go back to their stuff, they're going to take over the market share do 25% of the broker channel, take 25% of the overall market. I mean I guess people can say what they want to say, UWM's market share is fantastic, we're strong, we're dominant and we're growing, and we're going to continue to grow. And if we lose market share, I hope that happens because that means the broker market has gotten so big and it's going to continue to grow. That's my focus. My focus is growing the broker channel, helping every loan officer do a little bit more loans. They're helping every real estate agent that works with brokers do more business, like help them all win, and that's how we're going to win.

And the last note on that is I mean I just met with them personally. I think Rocket's fourth biggest client, 9th biggest client, like all these people are moving over to work with UWM. And so I think it's just kind of -- it's silliness to see those questions, not the question is fine, but silliness to see Rocket saying what they're saying about things in general because they're just trying to be in the broker channel, which is great because the broker channel is growing, and it will continue to grow, and we're going to continue to focus on it.

Let me do one more and then let's just open up to live questions because I think I'm reading these questions and so many of them overlap. Let's do this one. This one is Mikhail Goberman and Jeff Adelson, a couple of people saying, could you give an update on how the build-out of the in-house servicing platform is coming along?

So let me answer that question for you. We brought in 700,000 loans in-house UWM along with all the loans we do on a daily basis this year, which is amazing. And with that being said, our expenses still went down. Right? And so we expect a huge value and benefit of optimization of this. So 2025, we made the announcement 2026, we brought them all in. Most people can't bring 700,000 loans in, in 2 years, let on 1 year, and we did all that. And then 2026, 2027 is going to be optimization efficiencies. And so I think you'll see some of the cost savings there, but also the benefits for the brokers. The benefits through our partnership with Bill, but also just through the people wanting to stay here and refinance with UWM because the servicing platform is just better than everyone else in the country. And so we feel really good about our servicing platform and the in-house structure we've done, we've used AI and leverage AI in ways that you can't do if you had a servicing book for 20 years, right? Being able to -- we brought it in-house in the AI times, if that makes sense, and we're able to use AI to keep our costs.

And so you'll see costs down, service levels up on the servicing book, and hopefully, retention continues to be up, and that's a win-win-win for our brokers and for our investors and for everyone around.

So with that being said, let's see -- do we have some questions? We have no questions right now. I'm happy to take any live questions. If not, I can try to see if anything else in any of my papers to reach through. If not, we can end it early, too. Is there a question coming -- it looks like there's a question coming in. So raise your hand once again, if you have a question, we'll try to call on you, and then we'll open it up for you. So if you want to go ahead, Lee, and open it up. It's open.

Bose George okay, go ahead, Bose.

질의응답

Bose George

I had a question on MSR hedging. So you guys had hedge on this quarter.

Mathew Ishbia

I do not hear you, the question.

Bose George

Can you hear me?

Mathew Ishbia

Can you unmute, Bose?

All right. Well, I can't hear your question, Bose. I'm sorry.

Well, yes, if we don't have any -- if we can't get a question through.

Bose George

Matt, can you hear me?

Mathew Ishbia

Can you hear the question? Then why don't you someone read out say it aloud to me.

Bose George

Sure. Matt, I was hoping you could give us an update on the timing of the fourth quarter MSR sales. How much of those are completed...

Mathew Ishbia

DougHarter or Bose George, who's going to speak?

Doug, go ahead.

Douglas Harter

Great. Just update on the timing of when those sales are completed and how those sales compared to your current marks.

Unknown Analyst

Update on the MSR sales, how they compare to current marks and when they'll be completed?

Mathew Ishbia

Yes. So the MSR sales and how we look at that is in the current marks, we look at a lot of different things from a perspective of when we sell MSRs or whether we're not going to sell MSRs. The current marks on our MSR book, we feel are pretty good and strong. Now does it mean that we're not going to -- sometimes we'll make a little money, sometimes we'll lose a little bit of money on some of these deals. And so we don't really focus on it too much as a concern.

But what we do focus on is as our size, when we sell $40 billion of MSRs for an example, there's always going to be a liquidity discount there when we're doing such a big sale. So we are going to look strategically at maybe making smaller sales in 2027, which opens up more buyers and continues to help us be closer to those marks if that's the way you think about it in a positive way.

Jeff Adelson.

Jeffrey Adelson

Can you guys hear me okay? Just maybe wanted to ask about the plans for the servicing book. I know in the past, you've talked about getting that into the $400 billion range as you complete the in-house transition and hold more servicing, but just with the near-term sale, I know you talked about some smaller MSR sales next year, but just how do we think about the timeline to get into $400 billion from here and the strategic vision around the servicing book?

Mathew Ishbia

Yes. So the services -- heavy servicing house does not shift our strategy about being opportunistic. As you said, we talked about $400 billion of MSRs at some point. Us being able to originate as much as we can. I kind of put 400 and I think I may have even said 500, 400 to 500 is the max that everyone has, which is basically 2x our origination capabilities. But we don't really look at it like the strategy has not shifted at all, if that's the question. The strategy has not shifted.

As and I feel really good about where we're at from a from an MSR servicing book perspective, also our servicing ability. And now not having external sources [indiscernible] and Mr. Cooper being involved with it all, we have a lot more control of the process. And so we will continue to grow the servicing book because we do a lot of loans. But if there's an opportunity to derisk, deleverage and bring in a lot of cash, I think that's a positive, which then puts our debt holders, our equity holders, everyone in a better position across the board. And so we will look at both those things. It's not shifted my strategy as we've always been opportunistically growing, but at the same time, opportunistic selling as well.

Bose?

Bose George

Hopefully you can hear me now. You guys had the an MSR, I guess, a hedge on this quarter. Just curious what going forward, is there a plan to have a hedge on the servicing or you kind of go back to what you used to do, which is just leave that asset unhedged?

Mathew Ishbia

Yes. So good question. So in general, I think you saw we hired a new Chief Investment Officer, Randy Parto, who's done a great job his years of experience 20-plus. I mean he's excellent. He has a great perspective on it and have him kind of running that at the highest level now in conjunction with our CFO, Rami Hasani, and we're figuring all that stuff out. The way we look at it is, in general, the best way to hedge is to do a lot more loans when rates drop.

As long as you can [indiscernible] the MSR value is going down because rates drop, knowing you're going to do a lot of business. We can do a lot of business rates drop. So we don't look at hedging. We're definitely not 100% hedged, where before, as we had an issue, we were overhedged. We're now very strategic with it. We have a great hedging policy and process. We partner with our Oaktree partners on that as well in Vande. So we feel really good about the process and how we're hedging and how much to hedge versus how much not to hedge. And we'll continue to make that evaluation on a quarterly basis we met with the Board yesterday about it and about just things in general, tied to hedging, capital liquidity.

And so as you have less MSRs per the last sale, there's obviously less of a hedge that's needed. And obviously, if you can do a lot of loans when rates drop, you'll have an MSR write-down if that's the right way, but you'll do make $500 million in the quarter running the business. So it will all balance out. But I think the hedge -- the natural hedge is the best way to do it, and we're not back to a natural hedge yet.

However, we're very strategic with how we're handling right now, and I feel great about the people making decisions. And once again, the last hedge was we've hedged for years. And if you actually look at it, there's been situations that we've hedged and certain opportunities that we've done that for years. If you look at it since 2020 or '21, when we've actually made money on the MSR book versus the hedge over the time. We just had one bad quarter where I think everyone wants to talk about. But if you look at over the last 5 years, we've actually -- we're significantly hundreds and hundreds of millions, plus when if you look at our competitors, they would not be able to say that, once again, one mistake tied to a lot of things that we've talked about, but we feel like we're in a really great position on the hedge and just our MSR book in general.

Mikhail Goberman?

Mikhail Goberman

Just a question on expectations for what you guys are seeing in terms of volumes and margins in the fourth quarter thus far and expectations going into 2027?

Mathew Ishbia

Yes. So I think the mortgage market has got a lot of headwinds right now. So I think that, that's -- people have to realize that. But I also think, based on where we're at, we're in the best position to take advantage of it, take advantage of the opportunity from a rate perspective take advantage of opportunity like we talked about MSR as a bunch on this call and also from an AI and expense perspective. And so -- the volume numbers are definitely not going to be higher than they've been, right? If you think about the market -- mortgage market. I think I looked at something that showed that we're -- the 10-year -- this is like the second highest it's been in 5, 6 years. And so it's definitely a tougher market in general. But I think we're going to continue to sustain and do more business. And since we're mostly purchased, I'm not as concerned about the volume going down as much. as a lot of refinance shops will.

But it's not going to be -- I don't -- I wouldn't project us doing $40 billion, $50 billion, $60 billion this quarter, like I think it's definitely going to be different in the fourth quarter and the mortgage market is always traditionally fourth quarter, first quarter always the tougher times. But -- once again, last comment is expenses are down, AI is winning, brokers are growing. We feel like we're in the best position of anybody to capitalize on the opportunity.

Is there any other questions? Ryan Nash?

Ryan Nash

And Matt, so just picking up on the back of what you just said. Obviously, it's not a great environment for the mortgage market. assuming things don't change from a rate perspective, can you maybe just lay out a more cohesive plan on the Oaktree note repayment? Do you expect to be selling all MSR production? And how would you define success in your plan on managing it?

Mathew Ishbia

Yes. So thank you for the question. And so I would say, in general, on the Oaktree partnership is we understand the mortgage markets headwinds, as I've told you already, are out there. And I think, as I mentioned at the very beginning, I think every mortgage lender out there of any size or relevance is it has some holes right? And so our whole we've been able to solve for with the capital from ore and myself, and obviously, we're putting more here now with the rights offer or myself again. And so I feel like capital wise, we're in a good spot. -- how and when do we pay it off.

Obviously, the plan is it's expensive money. And so how do we pay it off more efficiently rather than less efficiently. And we're going to be using earnings as that opportunity. And so as we made a couple of hundred million dollars in adjusted EBITDA this quarter, and we continue to build our earnings, we'll be able to pay that down make sure we're doing all the right things for our debt holders, our equity holders and the mortgage brokers in our business. And so we feel good about that. I don't have a concise plan because, obviously, I can't predict what the market is going to be and how much income, but it's definitely a priority of ours to take care of that preferred and at the same time, to continue to deleverage and derisk the business so that we can not only capitalize when the opportunity comes with lower rates or a little bit better mortgage market, but dominate and grow and not only make a lot of money, but also help our brokers grow and make a lot of money and everyone succeed together.

So I feel like we're on a great trajectory going forward, but at the same time, I can't control interest rates, so I can do everything I can do outside of the control and be prepared for rates going up, rates going down, paying off Oaktree right at 2 years and a day? Or hey, does it take 3 years or 4 years like what's the process on that, and we're prepared for all those things, and we're excited about the partnership and what we're doing with it.

I think we've got 1 more Jeff Adelson is ask your question. Go ahead.

Jeffrey Adelson

Just to maybe follow up on the question on the near-term outlook for volumes. Just curious what you're seeing on gain on sale. I think you're still near the higher end of that $115 million to $130 million range you've talked about. Is there an opportunity to stay at the higher end or even grow that from here?

Mathew Ishbia

Yes. Good question on gain on sale. Yes, I think we're consistent. People don't use UWM because we're the lowest rates -- the only way other competitors, if you see our competitors' wholesale margins, the only way they can compete is by having the lowest rate. That's the only the way they have a chance, and they still can't get the business because they're not a great partner. They don't do all the things. And so -- for us, gain on sale, I think I expect it to be steady in the fourth quarter in the ranges that you described.

And with that being said, I think other people will continue to try to buy the business, lower the rates as much as possible to try to get their nose in there and try to be competitive. But the reality is, if lowest rate was the only thing that won business in the wholesale channel, there would be 1 winner, which is, I think provident funding, who don't think anyone knows who they are, but they have the lowest rates. No 1 -- that's not how it works, right? And so -- you have to have a better understanding of the overall business, not you, I'm saying our competitors. And so you have to understand that.

So I feel like we're in a great, great position from a gain on sale perspective, a volume perspective and whether the rates are gain on sales slightly higher or slightly lower than your range, but I definitely see it in that range. It's not going back to $60 million or $70 million like some of our competitors are at trying to win loans and stay afloat.

Okay. Sorry, there's 2 questions left. Laura? Mora?

Unknown Analyst

Wondering if you could speak a little bit about the planned delevering with the proceeds from the MSR sale in 4Q? And help us think about kind of what specific instruments to United is maybe looking to to run down there. And how we should kind of think about cost of capital evolving?

Mathew Ishbia

Yes. So good question. Thank you for the question. Understanding the capital we're bringing in, which is quite a bit -- how do we use that best, right? Can we deleverage whether it's our MSR lines, whether -- are we looking at maybe buying back some of the bonds and buying back some of the bonds earlier than expected or how can we utilize that cash to be the best, most optimum use. And so Rami, our CFO, along with Bandy, who I already mentioned earlier, are digging into it and what's the best use of those proceeds and we're going to get the benefit of that.

So I'm expecting -- as we talk about expenses, hopefully, the interest expense will go down a little bit because if we use that strategically, there's obviously multiple things we can do, whether it's to save money on the interest expense, whether we can't buy the Oaktree stuff back. So that's already locked in for 2 years. So what's the next best use of capital. And that's how we're allocating it. But with the 1 comment I'll say is cash is king. And so I will pay down stuff and we will do things, but having access to liquidity and the mass amount of cash that we have right now is a huge competitive advantage, especially in this market. So we're very conscious of it, but we will use it to save some money on the interest expense and use it strategically.

Daniel Albras, last question. Thank you.

Unknown Analyst

I understand the warrant situation, but I'm wondering if you guys would consider buying back some common shares in the future to reduce the increased dilution.

Mathew Ishbia

Yes. So good question. So it's definitely back to the last question. It's definitely a cost -- a benefit of extra cash. Can we buy back those shares, the common shares, is that an opportunity? And so we've discussed that at the Board level. And we always balance -- and I know you guys know is going to be doing this for years together, balancing the float versus the actual buying back shares and how we do that.

Everyone wants to get more float out and then we potentially buyback when they're at such low prices and there's always those opportunities. And so we're looking at all things. I'll say that. The right way to think about is we're looking at all ways to utilize the the excess cash that we have coming in from the rights offering preferred junior preferred from the MSR sales, how do we use that capital and liquidity, the best way to optimize our business. Some of those things are investments in AI. Some of those things are paying down debt, some of those things. So we're looking at all those things across the board and definitely the 1 you brought up is definitely on the table as a discussion point.

So with that, hopefully, the format was good, give us feedback on how to make it better, which we're going to make some changes next quarter. But the most important thing is I thank you for taking the time and your interest in UWM Hopefully, you get some value and understand how our business is going. We feel great about where we're at. and where we're going. And I said before, I think our business is in the best position possible in this market from a liquidity, capital perspective and a growth perspective with and investments we made. So thank you for the time. Look forward to talking to you guys all again next quarter. Have a great day.