In the next breath, he noted again the company’s financial performance, despite the headwinds. “But UWM has demonstrated its strength because of the foundation we’ve built for years and years. We can succeed in all of these markets. While other companies are exiting the market, losing money, shrinking and laying people off, we are the exact opposite. We are profitable, we are hiring, we are investing in technology and planning to continue to grow.”
UWM business model gaining attention
Given its recent balance sheet performance, UWM’s business model – yielding gains despite the softened market – is gaining attention. The Motley Fool, a private financial and investing advice company based in Alexandria, Va., broke down the reasons for the firm’s success while other firms languish.
In doing so, researchers examined the three basic business models used by mortgage companies, the most common being retail, marked by the use of loan officers or technology to find borrowers and assemble loans. The model has the highest margins but investment in technology or loan officer commissions can be sizable, The Motley Fool reported.
Then there’s the correspondent model where the mortgage company buys completed loans from a smaller lender before flipping it into the market – the preferred model of Mr. Cooper, The Motley Fool noted. While companies employing the model can do a lot of business, analysts noted, margins can be thin.
Which brings one to the broker model, the championed template at UWM. Mortgage brokers are treated as free agents who point the borrower to the company offering the best deal, The Motley Fool described. The broker assembles basic documents before sending the partially completed file to the mortgage company to fund the loan, according to the report.
Source: mpamag.com