10-K: UWM Holdings Reports 2025 Net Income Decline Amid Growth

UWM Holdings Corporation reported a net income of $244.0 million for 2025, a 25.9% decrease from 2024, despite a 17.2% increase in loan origination volume to $163.4 billion.

Summary

• Net income for the year ended December 31, 2025, was $244.0 million, a decrease of $85.4 million (25.9%) compared to $329.4 million in 2024.
• Loan origination volume increased by 17.2% to $163.4 billion in 2025, up from $139.4 billion in 2024.
• Adjusted EBITDA for 2025 was $697.3 million, an increase from $460.0 million in 2024.
• Total revenue for 2025 reached $3.16 billion, up from $2.67 billion in 2024.
• The change in fair value of mortgage servicing rights (MSRs) resulted in a loss of $1.055 billion in 2025, significantly higher than the $295.0 million loss in 2024, primarily due to decreases in market interest rates.
• A gain of $298.1 million was recorded on other interest rate derivatives in 2025, offsetting some MSR losses, compared to a loss of $215.4 million in 2024.
• Total expenses increased to $2.152 billion in 2025 from $1.828 billion in 2024, driven by higher salaries, commissions, benefits, and general & administrative costs.
• The MSR portfolio delinquency rate (60+ days) increased to 1.62% as of December 31, 2025, from 1.37% in 2024, with 0.26% of serviced loans in forbearance.
• The company entered into an Agreement and Plan of Merger with Two Harbors Investment Corp. on December 17, 2025, with the transaction anticipated to close in the second quarter of 2026.
• Plans are underway to transition substantially all loan servicing operations in-house by the end of 2026.
• Issued $1.0 billion in 6.250% senior unsecured notes due March 15, 2031, in September 2025, and repaid $800.0 million of 5.500% senior unsecured notes due November 15, 2025, at maturity.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral filing. While the company demonstrated strong origination volume growth and operational efficiency, the significant decline in net income due to MSR valuation changes and increased expenses presents a mixed financial picture. Strategic initiatives like the Two Harbors merger and in-house servicing transition offer future potential but also introduce new risks.

Positives

• Loan origination volume increased significantly by 17.2% to $163.4 billion in 2025, demonstrating strong market activity.
• Adjusted EBITDA saw substantial growth, rising to $697.3 million in 2025 from $460.0 million in 2024.
• Total revenue increased to $3.16 billion in 2025, up from $2.67 billion in 2024.
• Maintained its position as the largest overall residential mortgage lender and the largest wholesale mortgage lender in the U.S. by closed loan volume.
• Achieved a high average monthly client Net Promoter Score (NPS) of 87.5% for 2025, reflecting strong client satisfaction.
• Demonstrated superior operational efficiency with an average of 15 business days from loan application to clear to close in 2025, significantly faster than the estimated industry average of 39 calendar days.
• Continued significant investment in technology, including AI, with approximately 2,200 team members dedicated to technology and information systems as of December 31, 2025.
• Successfully managed interest rate risk, resulting in a $298.1 million gain on other interest rate derivatives in 2025.
• Maintained compliance with all financial and operating covenants under its warehouse facilities and senior notes as of December 31, 2025.
• Increased its ownership interest in Holdings LLC to 16.8% in 2025 from 9.9% in 2024 through Exchange Transactions.
• Reported high employee engagement, with 97% of team members feeling they belonged from a diversity and inclusion standpoint in a 2025 survey.

Negatives

• Net income decreased by 25.9% to $244.0 million in 2025, down from $329.4 million in 2024.
• Experienced a significant decrease in the fair value of Mortgage Servicing Rights (MSRs) by $1.055 billion in 2025, primarily due to declining market interest rates.
• Total expenses increased by $324.9 million in 2025, outpacing revenue growth and impacting profitability.
• The MSR portfolio delinquency rate for loans 60+ days past due increased to 1.62% in 2025 from 1.37% in 2024.
• Net cash used in operating activities remained substantial at $2.6 billion in 2025, following $6.2 billion used in 2024.

Risks

• Dependence on macroeconomic and U.S. residential real estate market conditions, including changes in U.S. monetary policies that affect interest rates and inflation.
• Reliance on warehouse and other short-term financing facilities, with exposure to margin calls if collateral value decreases.
• Ability to sell loans in the secondary market, including to Government-Sponsored Enterprises (GSEs) and Ginnie Mae, and the risk of changes to their roles or guidelines.
• Potential failure to consummate the merger with Two Harbors Investment Corp. or to realize anticipated benefits, incurring significant time and expenses.
• New and additional risks associated with transitioning to in-house servicing operations, including regulatory compliance and retaining experienced personnel.
• Exposure to business, competitive, and underwriting risks due to exclusive reliance on Independent Mortgage Brokers for loan originations, including potential liability for broker conduct.
• Impact of actions taken by the Presidential Administration that could adversely affect inflation, interest rates, consumer discretionary income, and home building starts.
• Ineffectiveness of hedging strategies or unanticipated margin calls that could adversely affect liquidity or operations.
• Inability to continue to grow, or effectively manage the growth or decline of, loan origination volume.
• Risk of data breaches or other failures of cybersecurity or information security systems, including those of third-party vendors.
• Loss of key management personnel.
• Reliance on third-party software and services, which could become unavailable, unreliable, or lead to errors.
• Intense competition in the mortgage industry.
• Challenges in implementing and maintaining technological innovations such as Artificial Intelligence (AI), including potential defects, misapplication, bias, and evolving regulations.
• Exposure to legal actions, including claims of collusion, anti-competitive conduct, or violations of consumer protection laws.
• Inability to comply with complex and inconsistent federal, state, and local laws and regulations, including maintaining appropriate state licenses.
• Fines or other penalties associated with the conduct of Independent Mortgage Brokers.
• Errors or ineffectiveness of internal and external models or data used for risk management and business decisions.
• Dilutive effect of resales of Class A common stock, future issuances, or shares issuable upon Exchange Transactions.
• Loss of or inability to enforce intellectual property rights or contractual rights.
• Risk of counterparties terminating servicing rights and contracts.
• Servicing advances being subject to delays in recovery or not being recoverable in certain circumstances, impacting cash flows.
• Substantially all operations housed on one campus, making the business vulnerable to natural or man-made disasters.
• Unanticipated changes in effective tax rates or adverse outcomes from tax return examinations.
• Obligation to make substantial payments to SFS Corp. under the tax receivable agreement, potentially exceeding actual cash tax savings and impacting liquidity.
• Control by SFS Corp., whose interests may conflict with the interests of other stockholders.
• Anti-takeover provisions in the Charter and Amended and Restated Bylaws.
• Charter provision renouncing interest and expectancy in certain corporate opportunities for UWM Related Persons, except for residential mortgage lending.
• Exclusive forum provision in the Charter for certain types of lawsuits.

Future Outlook

The company expects to transition substantially all loan servicing operations in-house by the end of 2026 and anticipates the merger with Two Harbors Investment Corp. to close in the second quarter of 2026, subject to customary approvals. Management believes current liquidity sources will be sufficient to fund operations and loan originations for the next twelve months. The Federal Reserve has indicated a desire to make mortgage originations cheaper and more appealing to banks by removing the requirement to deduct mortgage servicing assets from regulatory capital, which could impact the industry.

Management Comments

• Our principal strategy that has driven our substantial growth over the past years, is our strategic decision to operate solely as a Wholesale Mortgage Lender—thereby avoiding conflict with our partners, the Independent Mortgage Brokers and their direct relationship with borrowers.
• We believe that by not competing for the borrower connection and relationship, we are able to generate significantly higher loyalty and satisfaction from our clients, the Independent Mortgage Brokers.
• Our model is focused on the origination business, with a specific focus on purchase loans. Historically, residential purchase mortgage loan origination volume has experienced less volatility in response to interest rate movements than the refinancing mortgage loan origination volume.
• We believe that by focusing on the purchase business we will be better positioned to deliver more consistent volume in increasing and decreasing interest rate environments.
• Our business is premised on our belief that the fastest, cheapest and easiest way for a borrower to obtain a residential mortgage is through the wholesale channel.
• If the wholesale channel share continues to grow, we believe that we will continue to materially grow our loan production volume due to our leadership position within the channel.
• We believe that our highly scaled, efficient and centralized mortgage lending processes are key to our success.
• We believe our closing process is the most efficient in the industry and results in shorter application to clear-to-close times than any of the other major Retail Mortgage Lenders or Wholesale Mortgage Lenders.
• We believe that our CR communication platform and process is a competitive differentiator for UWM, and contributes positively to our strong client service scores, via NPS.
• Our underwriting process is one of our key strategic advantages as our extensive training program and technology platforms allow us to produce a portfolio of high-quality loans, with an industry-leading time from application to clear to close and maintain the superior level of client service that allows us to attract and retain our clients.
• We believe that UWM Appraisal Direct streamlines the ordering and completion of property appraisals as part of the underwriting process, leading to high-quality, faster appraisals, and cost savings for borrowers.
• We believe that PA+ will help our clients scale their businesses during periods of increased volume.
• We believe that our technologies, automated workflow and experienced capital markets team allow us to quickly aggregate and sell pools of loans in order to make efficient use of our capital and warehouse facilities.
• Our focus on agency deliverable originations and speed to sale reduces our exposure to market volatility, liquidity risk and credit risk.
• We believe the development and proliferation of AI will have a significant impact in our industry.
• We believe that a critical component of our success is our corporate culture and our deep commitment to our mission.
• We believe this commitment to our team members is why we have been recognized again in 2025 for being a top workplace in the financial services industry.
• We believe a diverse workforce fosters innovation and cultivates an environment of unique perspectives.
• We believe personal and professional growth accelerates careers while promoting productivity and innovation.
• We believe in providing our team members the opportunity to do a lot of good and support the causes they care about.

Industry Context

StockSavvy.ai notes that UWM Holdings Corporation's continued growth in loan origination volume, particularly in refinance loans, contrasts with a generally challenging interest rate environment that has impacted the broader mortgage industry. The company's exclusive focus on the wholesale channel and significant investment in technology, including AI, positions it to potentially gain market share as the wholesale channel grows, aiming for 12% of the overall market if the channel expands from 20% to 30%. The planned in-house servicing transition and the Two Harbors merger indicate a strategic move towards greater vertical integration and asset management, a trend observed among larger mortgage originators seeking to control more aspects of the loan lifecycle and diversify revenue streams. The increase in MSR delinquency rates, however, reflects broader economic pressures on borrowers, a common concern across the servicing sector.

Comparison to Industry Standards

• UWM's average of 15 business days from loan application to clear to close in 2025 significantly outperforms management's estimate of the industry average of 39 calendar days for the same period, indicating superior operational efficiency.
• The company's 87.5% average monthly client Net Promoter Score (NPS) for 2025 and 87% over the past five years suggests a high level of client satisfaction, which is a key competitive differentiator in the fragmented mortgage broker market.
• UWM originated 42.5% of loans closed through the wholesale channel and 8.4% of first lien residential mortgages in all origination channels through the first nine months of 2025, maintaining its position as the largest wholesale lender since 2015 and largest overall residential mortgage lender, demonstrating significant market dominance within its chosen channel.

Corporate Governance

Legal Proceedings

• **Therisa D. Escue, et al. vs. UWM, SFS Corp., and Mat Ishbia (Filed April 2, 2024):** Class action alleging UWM improperly influenced mortgage brokers to steer borrowers to UWM at excessive pricing. The court granted UWM Defendants' motion to dismiss nearly all claims and dismissed the Company, SFS Corp., and Mat Ishbia from the case on September 30, 2025. UWM filed a renewed motion to strike class allegations and answer on October 28, 2025.
• **State of Ohio ex rel. Dave Yost vs. UWM (Served April 17, 2025):** Similar allegations to the Escue complaint under Ohio law. UWM filed a motion to dismiss on November 7, 2025. The Ohio AG filed an amended complaint on December 1, 2025, and UWM filed a motion to dismiss the amended complaint on January 6, 2026.
• **Jennifer Adams, et al. (AMC Plaintiffs) vs. UWM and Alexander & McCabe Financial LLC (Filed May 2, 2025):** Alleging unlawful, unfair, and deceptive appraisal fees under California law. UWM's demurrer was granted in part on January 16, 2026, and UWM filed an answer to remaining counts on February 2, 2026.
• **Ethan Allison and Mark Caloca, et al. (Website Plaintiffs) vs. UWM (Filed June 26, 2025):** Alleging damages related to tracking technologies on UWM's website. The court granted UWM's motion to dismiss the amended class action complaint without prejudice on December 21, 2025. The Website Plaintiffs filed a notice of voluntary dismissal without prejudice on February 2, 2026.
• **Andrew James McGonigle, et al. vs. UWM (Filed December 2, 2025):** Alleging violations of the Telephone Consumer Protection Act and Virginia Telephone Privacy Protection Act. UWM filed a motion to dismiss and strike class allegations on January 16, 2026, asserting the calls were not made by UWM.
• **Alexander Victor Lee, et al. vs. UWM (Filed December 8, 2025):** Similar allegations to McGonigle regarding TCPA and Texas Business and Commerce Code violations. The Lee Plaintiffs filed a notice of voluntary dismissal without prejudice on February 10, 2026.
• **Andrew Arnold, et al. vs. Appraisal Nation, LLC, AMC Links, LLC, and UWM (Filed December 16, 2025):** Alleging class claims against AMCs for Florida Deceptive and Unfair Trade Practices Act violations and individual claims against UWM for alleged misrepresentations in two loan transactions. UWM filed a motion to dismiss and motion to sever on February 11, 2026.
• **Bridget A. Warne, et al. vs. UWM (Filed February 4, 2026):** Similar allegations to McGonigle and Lee regarding TCPA violations. UWM denies allegations and intends to defend itself.

Related Party Transactions

• Lease agreements for corporate campus buildings and land with entities controlled by CEO Mat Ishbia and founder Jeff Ishbia, resulting in net payments of $20.831 million in 2025.
• Legal services provided by a law firm in which one of the company's directors is a partner, with legal fees of $0.6 million in 2025.
• Lease of aircraft owned by entities controlled by the CEO for business travel.
• Employee lease agreements where company team members provide administrative services to entities controlled by the founder and CEO.
• A ten-year, approximate $115 million naming rights and sponsorship agreement with entities controlled by the CEO for stadium naming rights and marketing benefits, with fees of $11.053 million in 2025.
• A $500.0 million unsecured Revolving Credit Facility with SFS Corp. as the lender, with no amounts outstanding as of December 31, 2025.
• A Tax Receivable Agreement (TRA) with SFS Corp., obligating the company to pay 85% of certain tax savings, with payments of $0.2 million made to SFS Corp. in 2025.

Stakeholder Impact

• **Shareholders:** The decrease in net income and significant MSR valuation loss could negatively impact profitability and stock price. There is also a risk of dilution from future Class A common stock issuances and Exchange Transactions, though a quarterly dividend policy provides regular returns.
• **Employees:** The company continues to invest heavily in its team members through training, health and retirement benefits, and campus amenities, with an increase in total team members to approximately 9,100 in 2025. A strong internal culture and diversity initiatives are emphasized.
• **Customers (Independent Mortgage Brokers):** The company's client-centric approach, continuous technology investments (e.g., EASE, BOLT, PA+, TRAC+), and high Net Promoter Scores aim to enhance satisfaction and loyalty, potentially leading to increased market share for the wholesale channel.
• **Creditors:** The company maintains compliance with all debt covenants and actively manages its debt through the issuance of new senior notes and repayment of maturing obligations, indicating sound financial management for its lenders.
• **Regulatory Bodies:** Ongoing regulatory scrutiny and numerous legal proceedings highlight the heavily regulated nature of the industry, potentially leading to increased compliance costs, fines, or required changes in business practices.

Next Steps

• Close the merger with Two Harbors Investment Corp. in the second quarter of 2026, subject to stockholder and regulatory approvals.
• Transition the servicing of substantially all loans in the servicing portfolio to an in-house platform by the end of 2026.
• Continue to evaluate capital structure and resources to optimize leverage and profitability.
• Continue to invest in emerging technologies, including AI, to further automate and optimize operations.
• Address ongoing legal proceedings and regulatory scrutiny.
• The draw period for the Ginnie Mae MSR Facility ends on March 20, 2026.
• The Board declared a cash dividend of $0.10 per share on Class A common stock, payable on April 9, 2026, to stockholders of record on March 19, 2026.

Key Dates

Recommendation

UWM Holdings Corporation demonstrates robust loan origination growth and maintains a leading market position, supported by significant investments in technology and a strong client-centric model. However, the substantial decline in net income for 2025, primarily driven by adverse MSR fair value adjustments and rising operating costs, presents a mixed financial performance. While strategic initiatives like the Two Harbors merger and the transition to in-house servicing offer long-term potential, they also carry execution risks. Given the current volatility in interest rates and the impact on MSR valuations, a seasoned investor would likely maintain their position to observe the successful integration of the merger, the effectiveness of the in-house servicing transition, and the company's ability to navigate ongoing market and regulatory challenges.

Keywords

Mortgage lending, Wholesale mortgage, Residential mortgage, Loan origination, Mortgage servicing rights, SEC filing, 10-K, Financial performance, UWM Holdings Corporation, UWMC, Interest rates, Financial results, Corporate governance, Risk management, AI, Technology, Secondary market, Fannie Mae, Freddie Mac, Ginnie Mae, Independent Mortgage Brokers, Two Harbors Investment Corp.