The country’s two largest mortgage lenders reported unexpected profits in the second quarter of 2023.
United Wholesale Mortgage and Rocket Companies both bounced back last quarter after dismal results at the beginning of the year.
UWM reported a net income of $228.8 million, making up for losses of $138.6 million in the first quarter of 2023 and $62.5 million in the fourth quarter of 2022.
It originated $31.8 billion in loans, up from $22.3 billion in Q1. The boost coincided with warm weather bolstering home sales, though this past spring buying season was tepid compared to historical norms.
“UWM continues to prove that regardless of the interest rate environment, our business model, coupled with the broker channel being the best place for a consumer to get a loan and the best place for a loan officer to work, is a winning formula,” CEO Mat Ishbia said in a news release Wednesday morning.
“We are hiring right now, whereas the industry as a whole is continuing to cut back on capacity,” he added. “Despite a historic decline in industry-wide origination volume during 2023, UWM remains profitable. Other management teams seem to have forgotten that during a mortgage boom, the majority of the opportunity is in the first six months. Companies that are not prepared for those events react late, hire late, train late, and miss most of the opportunity.”
Rocket reported a net income of $139 million and its first profitable quarter in half a year.
Rocket claims its net client retention – 97% over the twelve months ending June 30 – is the best in the business and gives it a competitive edge in the future.
“Rocket’s performance in the second quarter demonstrates the strength of our business and our commitment to delivering superior client service through innovation,” said Bill Emerson, interim CEO of Rocket Companies.
“In the second quarter, against the backdrop of housing affordability and inventory challenges, we reported adjusted revenue that exceeded the high end of our guidance range, and profitability on a net income and Adjusted EBITDA basis. These results are reflective of our continued focus on operating a growing and efficient business.”
Rocket’s leadership is changing following the retirement of longtime CEO Jay Farner. The company just recently appointed his replacement, Varun Krishna.
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