UWM Holdings shares plunged 40% on Thursday after the biggest U.S. mortgage lender suspended its dividend and secured a $2.05 billion capital injection. The move follows a quarter in which UWM lost $451.9 million, reversing a profit a year earlier.
UWM Holdings, parent of United Wholesale Mortgage, saw its stock plunge 40% on Thursday after the company suspended its quarterly dividend and lined up fresh capital. The $2.05 billion equity investment comes from Oaktree Capital Management and SFS Group Capital LLC, a newly formed vehicle owned by the family of UWM CEO Mat Ishbia, who is also majority owner of the NBA's Phoenix Suns.
Capital raise follows a weakened balance sheet
The Pontiac, Michigan-based lender suspended its dividend to preserve capital as its financial position eroded during the latest quarter. Total equity fell to about $1 billion as of June 30 from $1.6 billion at the end of March. Available liquidity stood at approximately $1.3 billion, including $498 million in cash and borrowing capacity.
In a statement announcing the dividend suspension and capital raise, Ishbia said: "We're taking decisive action to make UWM stronger, more liquid".
Quarterly loss reverses prior profits
UWM lost $451.9 million on revenue of $888 million in the second quarter, reversing net income of $170.4 million in the first quarter and a profit of $314.5 million a year earlier. Mortgage originations, meanwhile, totaled $39.7 billion in the second quarter, down from $44.9 billion in the prior quarter but essentially unchanged from a year earlier.
Lenders face a tough rate environment
The moves come as mortgage lenders grapple with one of the toughest operating environments in years. Investors have pushed up Treasury yields amid renewed expectations that Federal Reserve lending rates could stay elevated or move higher in the face of stubborn inflation. Elevated mortgage rates tied to the Treasury market have in turn kept homebuyers on the sidelines and limited refinancing activity, further dimming the outlook for housing.
UWM shares have now collapsed about 85% from their 52-week high, set in September 2025.
Source: CNBC
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