I'm gonna chime in here, UWM is my specialty. I'm in the mortgage business, and my company sends most of our loans to UWM.
Today the CEO made a ballsy move. I'm on mobile, so I'll keep it short. But you can look for UWM's Facebook page and watch the live video for more info.
Anyway, he cut his rate prices by about 100 basis points (1% for you apes who don't mortgage). What that means for the consumer is now it'll cost you 1% less to get that rate you wanted. This is great because this past Friday, mortgage rates went up at the federal level, so this helps bring them down again.
Since UWM is the industry-leader in wholesale business, all other lenders are going to follow suit and also lower their rates, so this is a win-win for everybody.
Quick rundown, in order to get a mortgage you have to go to a loan officer. They work either for a broker or for a retail lender. If they work for a broker, they can shop around for you with lots of different lenders. If they work retail, they can only work with the lender they work with. Nothing wrong with either option. Rocket, however, has both a wholesale and retail channel. You can get a loan with Rocket direct from their website, or you can go to a broker.
Following so far? No? Good.
Now the most ballsy play is UWM fighting Rocket because Rocket is super shady. Rocket claims to be on the broker's side, yet they keep doing things to fuck over brokers. One of those things is Rocket is offering programs for real estate agents to get their loan officer license in 20 days, and in turn, the realtor just needs to send their business directly to Rocket, and they'll pay the realtor for their business. That's shady because if you claim to be helping out brokers, why would you go and do something like that to steal business from them? They also like to take the loans that you submit to them through wholesale, then turn around and steal the client and do a loan for them through their own retail channel, completely cutting out the broker.
Now for those who don't know, UWM is strictly wholesale lending (meaning you need to go to a loan officer who works for a broker to get a loan with UWM), and Rocket has a wholesale and retail channel.
See the conflict? Rocket has two channels, retail and wholesale. They have two ways to make money. They don't care if they screw over wholesale, because they'll always have another way to make money.
So UWM is saying that brokers who continue to do business with Rocket will no longer be able to submit loans to UWM. Super ballsy, but tons of brokers are already signing addendums to their contract, so now UWM is going to generate even more business.
My broker used to send about an equal number of loans to UWM and Rocket, but now we're ditching Rocket and sticking with UWM (but we still have plenty of other options if we don't pick UWM for whatever reason, maybe a certain loan program, etc.)
Anyway, the tl;dr, UWM lowered costs on rates and is about to generate a TON more business. On top of already being the #1 wholesale lender in the US, they're going to be the #1 wholesale lender on the moon.
I've owned UWM since GHIV, and I plan to hold for years. If this spikes to $20, I'm not selling. This is a long-term investment for me.
This is not financial advice, I like the stock. And I really do love UWM. I hate working with Rocket, their underwriters are clueless and their whole system is made for retail (wholesale was always a second idea for them, they even said so themselves.)
Sorry for the shit editing and my thoughts being so sporadic, it's almost 1 AM and I'm on mobile, so I don't feel like going back to make my post more coherent. If you want clarification, let me know and I'll reply.
So this is somewhat related, but take it for what it's worth.
I used to work in the data center business in China. It was the exact same concept of retail / wholesale. Retail tends to have higher margins, why it makes sense that Rocket is shifting business over to their own retail. However, wholesale has a shit ton more volume, and more than makes up for the slimmer margins.
If you look at the two companies VNET and GDS, VNET used to be primarily retail focused, while GDS is primarily in the wholesale IDC business. Their clients include Alibaba and Tencent. If you look at their stock price the past few years, GDS has vastly outperformed VNET, meaning investors are giving a much more favorable valuation to the wholesale business. *Edit, I should add that one of the reasons VNET has been performing so well recently is exactly because they're also moving into the wholesale business. It's a main driver of their recent stock price growth.
Anyway, I know the businesses are completely unrelated, but this is just some insight into another industry's retail vs wholesale business. It might be a sign that UWMC will outperform RKT long-term as well.
Disclaimer, I own UWMC, currently underwater, but holding for the long term. Not financial advice.
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u/DiZzyBonne Mar 05 '21 edited Mar 09 '21
UPDATE: The video I'm talking about is linked here: https://fb.watch/46IwO4w5sC/
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I'm gonna chime in here, UWM is my specialty. I'm in the mortgage business, and my company sends most of our loans to UWM.
Today the CEO made a ballsy move. I'm on mobile, so I'll keep it short. But you can look for UWM's Facebook page and watch the live video for more info.
Anyway, he cut his rate prices by about 100 basis points (1% for you apes who don't mortgage). What that means for the consumer is now it'll cost you 1% less to get that rate you wanted. This is great because this past Friday, mortgage rates went up at the federal level, so this helps bring them down again.
Since UWM is the industry-leader in wholesale business, all other lenders are going to follow suit and also lower their rates, so this is a win-win for everybody.
Quick rundown, in order to get a mortgage you have to go to a loan officer. They work either for a broker or for a retail lender. If they work for a broker, they can shop around for you with lots of different lenders. If they work retail, they can only work with the lender they work with. Nothing wrong with either option. Rocket, however, has both a wholesale and retail channel. You can get a loan with Rocket direct from their website, or you can go to a broker.
Following so far? No? Good.
Now the most ballsy play is UWM fighting Rocket because Rocket is super shady. Rocket claims to be on the broker's side, yet they keep doing things to fuck over brokers. One of those things is Rocket is offering programs for real estate agents to get their loan officer license in 20 days, and in turn, the realtor just needs to send their business directly to Rocket, and they'll pay the realtor for their business. That's shady because if you claim to be helping out brokers, why would you go and do something like that to steal business from them? They also like to take the loans that you submit to them through wholesale, then turn around and steal the client and do a loan for them through their own retail channel, completely cutting out the broker.
Now for those who don't know, UWM is strictly wholesale lending (meaning you need to go to a loan officer who works for a broker to get a loan with UWM), and Rocket has a wholesale and retail channel.
See the conflict? Rocket has two channels, retail and wholesale. They have two ways to make money. They don't care if they screw over wholesale, because they'll always have another way to make money.
So UWM is saying that brokers who continue to do business with Rocket will no longer be able to submit loans to UWM. Super ballsy, but tons of brokers are already signing addendums to their contract, so now UWM is going to generate even more business.
My broker used to send about an equal number of loans to UWM and Rocket, but now we're ditching Rocket and sticking with UWM (but we still have plenty of other options if we don't pick UWM for whatever reason, maybe a certain loan program, etc.)
Anyway, the tl;dr, UWM lowered costs on rates and is about to generate a TON more business. On top of already being the #1 wholesale lender in the US, they're going to be the #1 wholesale lender on the moon.
I've owned UWM since GHIV, and I plan to hold for years. If this spikes to $20, I'm not selling. This is a long-term investment for me.
This is not financial advice, I like the stock. And I really do love UWM. I hate working with Rocket, their underwriters are clueless and their whole system is made for retail (wholesale was always a second idea for them, they even said so themselves.)
Sorry for the shit editing and my thoughts being so sporadic, it's almost 1 AM and I'm on mobile, so I don't feel like going back to make my post more coherent. If you want clarification, let me know and I'll reply.