UWM Holdings Corp

NYSE:UWMC

Earnings Call Transcript

[Operator]

Good morning. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the UWM Holdings Corporation Fourth Quarter and Full Year 2024 Earnings Conference Call. [Operator Instructions]

Thank you. Blake Kolo, you may begin the conference.

[Blake Kolo, executive]

Good morning. This is Blake Kolo, Chief Business Officer and Head of Investor Relations. Thank you for joining us, and welcome to the fourth quarter and full year 2024 UWM Holdings Corporation's earnings call.

Before we start, I would like to remind everyone that this conference call includes forward-looking statements. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the earnings release that we issued this morning. Our commentary today will also include non-GAAP financial measures. For information on our non-GAAP metrics and the reconciliations between the GAAP and non-GAAP metrics for the reported results, please refer to the earnings release issued earlier today as well as our filings with the SEC.

I will now turn the call over to Matt Ishbia, Chairman and CEO of UWM Holdings Corporation and United Wholesale Mortgage.

[Mathew Ishbia, executive]

Thanks, Blake, and thank you, everyone, for joining us today. 2024 was another fantastic year. I think you saw the headlines of one of the toughest mortgage years in a while. Obviously, the last 3 years have been tough. We grew 29% year-over-year, about $139 million. Our [ advanced ] sales up 20%, 110 basis points and the broker channel, which is the biggest indicator, all things we've been talking about grew quite a bit as well. I think the third quarter metric was maybe 27.4%, which is far higher than we've seen in 15 years.

All of the things we've been talking about have continued to happen. We continue to dominate the purchase market, leveraged our competitive advantages in talent, technology and world-class service. And like I said, help the broker channel grow its highest share of industry in years. And so exciting to see. We retained our title as the largest mortgage company in the U.S. Now I think it's in 2024 was the third consecutive year we're the #1 mortgage company in America. The fourth consecutive year, the largest purchase lender in America. And now I think it's the tenth consecutive year as the #1 wholesale lender. So we're very proud of what we're doing here at UWM. 2024 was an amazing year, and we're super excited about 2025.

As I've spoken in the past few quarters, we continued to invest in cutting egg technology, including AI, investing in our people, and we're in the best position to capitalize on any change in the current market dynamics. There are about $2.5 trillion and growing in mortgage rates over 6%. And so it won't take much of a shift on rates for those loans to be in the money. No matter what happens to the market, we are focused on what we can control and making sure we are more prepared than our competition. You've all heard me say this before, I'll say it again. The unique thing about UWM is that our business is strong enough that we can simultaneously win big now while also preparing for the future, whether it be interest rates dropping, consumer trend changing, new technology or even regulatory changes.

And 2024 was the lowest home sales year since 1995 and UWM had our best purchase year of all time. Over $96 billion of production. We actually think that might be the highest of all time for any direct lender in history. But either way, we had an amazing 2024. I guess we had $139.4 billion of overall production, 29% increase. We also tripled our refinance business in 2024 compared to 2023 despite the interest rate environment. which we'll talk about a little bit later. We deliver about $330 million of net income, $329.4 million to be exact, and our game margin is 110 basis points, which is up from 92 basis points last year.

Turning to the fourth quarter. We had an amazing quarter across the board, $38.7 billion in production well within our guidance. It's also worth pointing out, in that quarter, we did over $17 billion in the month of October. There's like a 5-week minor rate drop, what was it in August and September. And with that little thing, we almost doubled our business. And if you kind of do a quick run rate, you're thinking $51 billion, $52 billion, $53 billion with a small rate drop. What can happen if actually a bigger rate drop happens. We're going to all find out, but we are prepared here to double our business plus, which is exciting. Gain margin was 105 basis points, well within the guidance. for the quarter. And obviously, we did $40.6 million of net income. So once again, great year, great quarter. Firing all sides in UWM, we're ready for whatever the market gives us and whatever market does, we're ready to dominate here.

So I'm going to turn over to our CFO, Andrew Hubacker, who will use more information.

[Andrew Hubacker, executive]

Thanks, Matt. Matt already covered many aspects of our Q4 and full year financial performance. So I will just focus on a few -- just a few additional highlights.

We remained profitable operationally in 2024 with $460 million in adjusted EBITDA. For Q4, our adjusted EBITDA was $118.2 million. These operational results were largely consistent with the prior year, even as we invested significantly in people, processes and technology to prepare the company for continued growth. We invested in growing our operations, underwriting and technology teams to support increased production volume, and we believe that we have greater operational capacity than we did in 2021 when our origination volume exceeded $226 billion. Said differently, we believe we can currently handle more than $100 billion of additional origination volume without increasing our fixed expenses. And despite our significant short- and long-term investments, we earned $329 million on a GAAP basis and $460 million on an operational basis in 2024.

We also maintained our liquidity and capital and leverage ratios within targeted ranges in the current environment. As of the end of the year, we had approximately $2.1 billion of total equity, just over $500 million of cash, approximately $2.5 billion of total accessible liquidity and an MSR portfolio with a fair value of approximately $4 billion. We talked about this throughout the year, but in so many ways, 2024 was a year of investing in our operational capabilities to prepare the company and the wholesale channel for what we see as significant market opportunities. We've also focused on being prepared for these opportunities from a capital and liquidity perspective, and we believe that we remain well positioned operationally and financially for any market cycle.

I will now turn things back over to our Chairman, President and CEO, Matt Ishbia, for closing remarks.

[Mathew Ishbia, executive]

Thanks, Andrew. I'll close with a few points before the Q&A. 2024 was a banner year. From a production perspective, as you can see, we did over great income as well, really cash our 30 year where we dominate in a down mortgage market. Where you can't see the numbers in 2024 is a huge year of technology and artificial intelligence front, we invested in AI in 3 major categories, knowledge, efficiency and growth and we are winning on all fronts. And you'll see some of those things start to result in 2025, '26 in our financials and our production.

The broker channel continues to show incredible momentum. In third quarter 2024. Obviously, the fourth quarter numbers aren't out yet. For the broker channel share of all direct fund was 27.4% up 7 percentage points from '22 third quarter, so 2 years grew 7% and almost double from where it was in the third quarter 2020. So in 4 years, it's almost doubled. It's amazing to see, can we do it again, right? The [ allegates], can we double it in the next 4 years again? I don't know, but I know we're working hard towards it and the broker channel is gaining momentum, just like we said it would, since we went public years ago. Additionally, by our calculation, over 16,000 loan officers join the broker channel with over half of them actually leaving from the retail channel to join the brokers. This momentum is continuing, like we talked about in '23 and '24. We're excited to see how it continues to grow going forward.

With all these great things with technology, brokerage always coming back to our people at UWM. The care factor and the culture we've created at UWM is what differentiates us. Also 25,000 clients, we welcome on our campus. We're training each year, helped spread the culture of the brokerage channel. Our team loves coming to work every day and our training program, both internally and our foreign clients remains world-class, so our people can continue to grow and flourish here UWM.

In 2025, our priors remain the same. Build the best technology and provide the best service to the broker channel, take incredible care of our team members and clients by treating them like family, win every single day by [ dominating ] purchase and staying prepared for a shift in rates and continue to reward our shareholders. I'm very proud of what we did in 2024, and I'm excited about 2025. Now looking to the guidance in Q1, we expect to do $28 billion to $35 billion. As you guys always know, the first quarter is always the lowest production quarter, and so we expect that to carry on this year as well. Last year, we did $27.6 billion. So that's actually below what our low end of the guidance is this year. We also expect gain margin to be between 90 and 115 basis points for the first quarter. So we're expecting a great first quarter, but even more importantly, an amazing 2025 here at UWM.

So now I'm going to turn over to questions. Thanks for your time today.

[Operator]

[Operator Instructions] Our first question comes from the line of Terry Ma with Barclays.

[Terry Ma, analyst]

Maybe just first starting with operating expenses. It was quite a bit higher than what we were expecting this quarter. I'm just curious if there was anything onetime in there and kind of like what we should expect for a run rate going forward?

[Mathew Ishbia, executive]

Yes. No, it's a onetime investment, but we're going to do it every month. So what we're doing is we're investing in our business to dominate. So the expenses are not even thought of my mind. We're prepared, as Andrew said $100 billion more, but maybe to more than do that, like we can literally double our business. And so preparation is key. As you guys saw, the little refi boom in October. We've almost doubled our business. Nobody else can do that.

And so we're prepared for that, not only from the refi perspective, but also the purchase as the momentum is really, really strong right now, and we're prepared to dominate. And so our business model is not nickel-dime, every expense. Our business model is win. And so these are investments, not expenses. And in the big scheme of things, these little investments that we're talking about are going to pay such huge dividends, just like we've always done. And so the expenses, we probably don't need to hire many more people. So we're going to be more flatlined is how we think about it from a perspective of replacing attrition. So it's not like our expenses will go up more, but these were investments. 2024 was an investing year and a technology building year and '25 is a dominant year. That's what we're going for.

[Terry Ma, analyst]

Got it. Okay. And maybe just on kind of refi. You mentioned you kind of tripled it in 2024. Maybe just talk about all the initiatives you're doing around that, kind of what the outlook is for share and refi kind of going forward?

[Mathew Ishbia, executive]

Yes. Well, share on refi will be interesting to see. But in general, the outlook is we are prepared back to my earlier statement on the same topic to double our business. And you saw we tripled the refi share still doing more purchase business, which is phenomenal. I think it was the largest purchase year in the history by any lender. And obviously, it was a slow year from a purchase sales and all those stuff in the market.

So we think 2025 will be a better year. There's more houses for sale. And then on the refi side, you're talking about like there's trillions of dollars that just need about a quarter lower rate than we are right now, like we're not far off. The tenure is at 4 30, I think, ish. I always tell you 375 is where the money is at. But if it gets down closer to 4, you're going to start seeing some of this, and we are prepared. And so we're excited about the opportunity on refi. We're going to continue to dominate on purchase, and we're excited for what's going to happen in 2025. We really think it's going to be heck of a year.

[Operator]

Our next question comes from the line of Eric Hagen with BTIG.

[Eric Hagen, analyst]

Okay. So you guys have been really active with various incentives, offering other ways for successful brokers to pass along savings to borrowers. How do you maybe measure the success for these initiatives like how do you like benchmark that success at different levels for interest rates maybe or mortgage rates?

[Mathew Ishbia, executive]

Yes. Thanks, Eric. Appreciate the question. Yes, there's a lot of ways I can go through. It's probably more complicated and more detail than I'm going to do on this call. But the key thing here is this is a lot of the -- if you noticed, I have bumped our margin for the first time from 85 to 110 to 90 to 115. So first time for years, we were at 75 to 100 in troughs. I believe the opportunity is coming. Now I don't -- doesn't mean we're going to be on the high end of these things. I think we're going to be consistently delivering what I always deliver, which I tell you we're going to do what we do it.

But what I'll tell you is you see these incentives and these marketing things, and these are all great, but also, you got to understand the all-in margin that we deliver a focus of ours. And so the way I look at this, there's measurements on retention of those brokers and the LOs and what percentage of their business they use UWM for, how do we get them in the door, how do we get them bought into more of our products and services from training, with success track this week alone in the middle of February in Michigan, we have over 900 clients that flew to [indiscernible] mission. I know Eric, you've been here before. It's beautiful, but it's freezing out here, but people still flew out here because they're getting trained.

And so -- those are some of the ways you measure those investments. It's like I'm investing in giving a price incentive that might do this that drives them to understand what we do, which helps them grow their business, which then helps them get more business, which then drives UWM. Once again, that's a very layman's way of saying it. And I have a team of analytics people that have detail beyond detail about how it actually works and how we make it happen. And so a small little thing. If you look at -- I kind of missed it in the pre-talk. We're like in October, like we doubled like overnight, and it's like a $52 billion to $54 billion run rate with really not even a refi like. So it's like how do I train our brokers and coach them ready to do refi, streamlines or [indiscernible]? Or how do I teach them how to do cash outs? And how do we do these things to getting them prepared, it's all about preparation so that they can dominate and then we can dominate.

[Eric Hagen, analyst]

Great stuff. Appreciate that. I always appreciate your thoughtful answers. I mean the -- looking here at the volume and margin guidance you gave for the first quarter. I mean how much of that drop quarter-over-quarter would you just attribute to just seasonality versus there being an actual falloff in demand that these -- at these rates? And is there like a baseline minimum volume of originations you might expect right now, even if rates were to go higher than they are today?

[Mathew Ishbia, executive]

Yes, no, great question, Eric. I appreciate your thoughts on it. And so we guided to 28 to 35 last year. I think we did 27.6 in the first quarter. I don't remember what I guided to last year, but I would say it's materially less than what we're at right now. These numbers, like I expect us to do more each quarter. We're trying to build upon building. So the way we look at it is right now, these numbers are actually really good. If you see whatever else will guide you, whatever else, things you're going to do, be able to guide to 20 to 35 [indiscernible], I'm not going to exceed those numbers. like I'm trying to give you real numbers where I think I'll be in this range on margin and at the same time, volume. But we feel really good about that.

And to do $30 billion, let's just call that the number, $29 billion, $30 billion in the first quarter. I don't know the last time that's been done besides in 2020 and 2021. And so if you think of the last 10 years of any mortgage company, why don't you find anyone that's done $30 billion in the first quarter, besides '20 and '21, I don't think it's happened, maybe '22 because it was in holdover from the rates. But it's -- what I'm saying is it's [indiscernible] an amazing quarter. And knowing that the second and third quarters always pick up. We kind of look at this as the low quarter. First quarter is always the worst. Fourth quarter is the second worst, second and third are always awesome.

[Operator]

Our next question comes from the line of Derek Sommers with Jefferies.

[Derek Sommers, analyst]

To follow up on the guidance question related to volume. In the first half of the year, we saw a purchase mix at around 80% in the second half, call it around 60%. Kind of what are your expectations for that mix heading into '25?

[Mathew Ishbia, executive]

And you're saying the purchase mixture of the market?

[Derek Sommers, analyst]

Both of the market and UWM.

[Mathew Ishbia, executive]

Okay. Yes. I mean a lot of it is dependent on interest rates, right? So like the way I look at it, and our focus is like how do we do $100 billion of purchase, right? And then refi, we did $96 billion of purchases this year, and we -- there wasn't much refi. Can we do $100 billion, $150 billion of refi? Possibly. If rates go up to 7.5, well, we'll do $20 billion of refi, $30 billion of refi, right? And so understanding what the market and the tenure, that's why it's like literally where no one else will be able to tell you this, Derek, that like I can do $130 billion to $140 billion this year or I could do $260 billion this year, right? And I could do it at 90 basis points of margin, I could do it to 130 basis points of margin. Like that's how wide of a range it is.

But everyone else will say, "Oh, well, if the market turns and this happens and..." we're actually prepared to do that right now. Like if the rates drop tomorrow, something happens, we'll do -- we could do $60 billion in the second quarter, right, at good margins. So that's how comfortable -- that's back to the first question about expenses. It's not expenses, it's investments in the business, investments in the future. And while making these massive investments from technology and operations and people, while making those mass events, we're still profitable, right? And very probably, we don't count the MSR fluctuation, which I have no control of obviously. And so we feel really good about that, and I think we're really ready to do so. So 60%, like it's hard to predict the number, it's all dictated on rates. But for us, 60%, 65% purchase, 65% to 70% purchase at a higher rate and then it could flip to 50-50. It could go 60-40 refi if the rates drop far enough.

[Derek Sommers, analyst]

Got it. Helpful commentary there. And just how -- what's your current approach to managing servicing UPB levels kind of relative to origination trends?

[Mathew Ishbia, executive]

Yes. So we monitor it very closely. We understand the servicing asset very, very well. And we're still probably the only one out there originating at such a high level that our asset goes up as a volume perspective with new originations. But we look at it all the time. We decide whether do we want opportunistically sell. We could go through the process say, we're going to retain it all. And just double the servicing book over this year, right? We could do that as well. There's a lot of things that we look at.

We like the asset in general. But at the same time, when people are going to pay us a 7 multiple, well, I'll sell it for 7 multiple, right? And so we look at some of these numbers and sometimes people are looking at paying those numbers. And if they're not, then we retain it because we feel really good about the asset. And so it's a balancing act, understanding cash and cash consumption, while at the same time, building our servicing portfolio and helping our brokers continue to grow. So we feel good about where we're at right now. And you can ask me like what the vision is, what the strategy is. I can tell you all that stuff, and I could say, but tomorrow, something could change, and I'll modify it, right? And that's how we look at it. We look at it every day because that's we're in the weeds of the business.

[Operator]

Our next question will come from the line of Bose George with KBW.

[Bose George, analyst]

Actually, just following up on that question on the MSR. I mean, given that you guys issued debt, you obviously have a lot of cash on your balance sheet, a lot of liquidity you've paid down the warehouse line. Does that change how you might -- what you might do in terms of MSR sales? Or are those 2 kind of independent divisions?

[Mathew Ishbia, executive]

Everything is tied into it, right? So everything is part of the equation, but nothing drives the equation, right, besides the conversations, the data, understanding the marketplace. And so it's hard to answer the question, but going through like what comes into the thing. We have a risk committee. We meet with everyone organizationally to make decisions on these things. And so it depends on the situation. I can give you the exact answer right now and then someone calls back and say, "Okay, we'll bump that option to the MSR deal to this number" we'll say, "okay, well, for an extra $30 million of cash, all right, we'll do it" right? And so all those things are coming to it.

The nice part for us on MSRs is we actually continuously make it. It's like we make it. So we originate -- no one else makes it at the levels we make it. So therefore, everyone else is trying to buy it and get something that we make. I can go make more, right, any time. And so we go make more every single month, every single quarter, when no one else originates the levers we do. And so we're constantly originating and making the MSR asset. And therefore, we look at all the aspects of it and make decisions on whether we sell or not. We can sell excess, but we replenish it every single month, every single day. The numbers are -- so it's not as much of a concern where other places like oh, they sold their MSRs or they're not selling, but our number moves materially based on how much we originate.

[Bose George, analyst]

Okay. Yes, makes sense. And then actually, going back to, I think, Andrew [indiscernible] in $100 billion, you could originate without increasing fixed expenses. I was just curious, is there a good way to think about fixed versus variable in that sort of scenario?

[Mathew Ishbia, executive]

Not really. I mean, we're prepared fixed wise. Obviously, there are variable expense every long ways credit report costs and all these things go up all the time. But we feel really good about -- or trying to figure out how to do a model, which I respect and understand, but we're in a really great position from a fixed expenses. We don't have as much -- the fixed expenses operationally and then there's obviously variable on every single file. But sometimes there's less variable expense you will realize. And a lot of these numbers hit the bottom line.

And I think -- although I can't show you each example from the month, but like the gain on sale margin that will go up and the volume that will go up, is so excessively more than any expenses fixed or variable that come on our balance sheet or come on our income statement that it's going to be a huge, huge difference in a positive way. And that's why we're prepared because if you miss that window, which is whatever else does, is they keep their expenses low and then the market moves, what happens, like look at 2021 when that stuff happens, like we're able to make billion plus in a quarter, right? Like -- and so -- but if you're not prepared for that, like these things pass you by. And so prepared. There are going to be variable expenses that are a little more than normal if you do more volume, but it's not a big number relative to it, and it's going to be a huge amount of money hitting the bottom line, which is what we're prepared for.

[Operator]

Our next question comes from the line of Brad Capuzzi with Piper Sandler.

[Bradley Capuzzi, analyst]

Just wanted to talk about if you guys had any updates on the dynamics playing out within the broker channel. Obviously, some of your peers have been talking about it and UWM obviously has a very strong hold on the channel, but I was wondering if pricing has been rational if you're seeing any increased competition?

[Mathew Ishbia, executive]

Yes. So the broker channel is winning. It's growing. And I think, I don't know how long you've been doing it, Brad, but you've been into our office [indiscernible] for you probably understand a little bit about the business. But like the broker channel is growing. It's growing faster than I thought it would grow to be honest with you. It seems that it's almost doubled in 4 years, it's crazy to even talk about. I said it when we went public. And so you can go back and pull my road show and all the stuff, everyone else's roadshow, everyone said they're going to focus on wholesale because it's growing. No one thought it to grow as much as I said it would and it has.

At the same time, everyone says they're going to get into it, and I love it. I love it when these guys try to come and play with us because it's only good for the brokers. And at the same time, they can't compete and any time a broker use these other lenders, they just kind of say, "Oh my gosh, I can't use them again." And so it's okay. I like the company, and we have not seen any increase in pricing competition to be honest with you. We are very clear. Our margins actually -- as you saw were up 20% year-over-year, and we did more business almost 30% more year-over-year. And so yes, everyone is coming for the wholesale channel. Everyone wants to be involved with the brokers, but none of them are willing to do what it takes. And what it takes is technology, partnership, helping brokers win and grow, and we are in that game all day every day. They're going to follow our margins, I tell you, we control it. I set the margins daily, and we set them and everyone else follows us. We are the leader, and it's not close.

But great for the competition. I think it's important that they tell you that stuff, so you can move the price targets up, all that ask. You should probably move ours up to, by the way, because you're just a [indiscernible] yourself. But anyways, like all that stuff is silos, right? People want to come and they've been saying it for years, [indiscernible], we're going o be the #1 wholesale, so wants to go back and plot? We're going to be #1 wholesale that we're going to take UWM down. We are almost 50% of the market. So we're excited about it. We love the competition, but the best part about the whole thing that I just went through is brokers are winning. Those loan officers retail owners or they're leaving to join broker-owners. Brokers are growing because they're cheaper, faster and easier.

And with the new administration, it's only going to help brokers even more. You watch out, it's going to help brokers grow, and we're going to keep growing with them.

[Bradley Capuzzi, analyst]

And then can you just talk about the interest rate revenue of hedges put on this year? Do you expect these hedges to continue in 2025? And you guys have any external target on a hedge ratio?

[Mathew Ishbia, executive]

Yes. No, there's not really even hedges. The way I look at it is there's a lot of stuff that we looked at with market volatility to understand while the election process is going on. And we pulled some of those we wanted to make sure we had some security and some safety on both ways, up and down during the volatility in the markets. And that's smart business, and we'll continue to do that type of stuff. But we pulled that stuff off in December. And so we do not have that stuff tied to it. I don't look at the hedges like me, you said, but that's not how we looked at it, but we looked at it as protecting the business, understand the markets, understanding volatility, who knew what would happen with presidential elections, along with other regulatory things. And so -- but we do not have those in place as of December after the election, we made a decision to not go forward with that. And at the same time, we can put them back on tomorrow and make different decisions as we meet all the time, but that's not part of the equation for 2025 at this point.

[Operator]

Our next question will come from the line of Doug Harter with UBS.

[Douglas Harter, analyst]

Hoping you could talk a little bit about your outlook for kind of the leverage, net funding debt went up and kind of how you think about what is the level of equity you need to run this efficient business?

[Mathew Ishbia, executive]

Thanks, Doug. Appreciate the question. We look at all these things every day, CFO, finance team, everyone is on top of all these details. Network is obviously important. We make income. We obviously pay a great dividend out to all our shareholders, which we'll continue to do. But you're talking about stuff that I don't think really impacts the business at the level that we should be talking about in this earning [indiscernible]. Of course, we're going to meet all the metrics and all the different things, but building up capital is important. Having liquidity is the most important, and we have those things at UWM. We'll continue to have those things as we earn income. We have access to getting more liquidity with lines of credit and selling MSRs. At the same time, we're selling a lot of MSR and you make money on some of these because people are bidding being higher and higher numbers because the truth is, we're the only ones originating them.

So in general, our -- all of our ratios are really strong and we feel really good about where we stand. And we monitor it every single month, quarter, however you want to think about it. And we're in a really, really strong position, not only for this year but for future years as well.

[Operator]

Our next question will come from the line of Jeff Adelson with Morgan Stanley.

[Jeffrey Adelson, analyst]

Matt, last quarter, you comped on some of the new changes coming through with the new administration in place today. Obviously, we're seeing a lot of news flow coming out [indiscernible] with different changes at the various agencies like the CFPB, there's been talk of GSE reform, et cetera. Just maybe give us an update on your latest views here, what maybe you see coming out in the regulatory political front and how that flows to United and the broader mortgage industry?

[Mathew Ishbia, executive]

Yes. No, I think it's all very positive, to be honest with you. So President Trump's come in and done a lot of things he said he's going to do. I think he's put some really good people in place. I think they're not confirmed yet, but the new FHFA director, who I think comes from the industry, which is a huge success for our industry. New CFPB Director, which was a different focus than what they had before. I think these things are massive, massive wins for our industry. And I'm extremely bullish on those things for the next 3 or 4 years, obviously, with President Trump, the place President Trump's leading and doing things and doing all things you said to do with making cuts and different things. I think it's all upside, all positive.

The only thing that your question is how does it impact interest rates, which a lot of you want to talk about. And so if it impacts interest rates positively, then this is a bull run like you haven't seen probably since 2020, '21. If it doesn't impact interest positive and interest entity where they are, well, it's still a positive uptick. My expenses will be lower in certain spots, opportunities will be lower because of some of these better leaders in place. And I'll just say I don't want me disrespect to the past people, but quite honestly, there was not a great connection to the industry.

And so it's only better. The new FHFA Director will be better. The new HUD directors got to will be better. The new CFPB director [indiscernible] will be better. All these things will be better than we had before. So anyone monitoring our industry would say, "Oh, the industry is going to have upside and better opportunities than they had the last 4 years." Now in the last 4 years, we did a heck of a job. I feel pretty good about it. So if it's going to be better, I'm happy with it. And I think President Trump is doing good things. It is great to have a leader lead and hopefully do good things for not only our industry but America in general.

[Jeffrey Adelson, analyst]

Just on the float strategy from here. I know you've already taken some recent action to increase that. But can you just maybe give us an update on the thinking for the rest of the year here? And would you guys be looking to maybe achieve some of that via acquisitions or other methods?

[Mathew Ishbia, executive]

Yes. No, I appreciate it. We look at everything. We look at everything all the time, how do we make things better. Getting more float out there is important. But at the same time, the stock price is still low. It's hard for me to sell or do anything at this stock price. It's a silliness. Even your price target is silly, too, [indiscernible] years as well. But once again, we're going to do better. We're going to keep winning. And people that buy into and understand what UWM does, we'll understand that, and we'll continue to grow with us. And so yes, we will have more float, and I have plans and strategies around it. That's first. Second, when we look at acquisitions, yes, I look at everything, and there's opportunities out there. People want to be part of our team. And then third, and finally, is like UWM wins regardless of these things, right?

Like if people want to talk about the stock price, and I kind of teased you guys a little bit about some of this stuff, but it doesn't really matter because we are winning every single month, every single quarter and anyone that invest in UWM gets a massive return from the dividend. And at the same time, the growth that we're having. And so there's nobody that doesn't think that the industry is going to have a better than 4 years than we had the last 2 or 3, right? There's no one. I don't think there's a human being out there. So if you just understand that, that, hey, the last 3 years have been the trough, there's no way the next 4 are going to be worse. That's factual.

So we're going to grow, we're going to win. The stock price will grow, the float will grow. Opportunities will grow. UWM will make more money. Brokers will grow like it's all upside, better [indiscernible], better politics stuff, better regulatory. Like all is better, better, better. And so the way I look at it is this all upside right now? Does that upset happen tomorrow? Or do have in 3 months, 6 months, 12 months, 18 months, but it's all better than the last 3 years. And there's no smart person on this call or in the room would say that they don't think it will be better in the next 3 to 4 years.

[Operator]

[Operator Instructions] Our next question will come from the line of Mikhail Goberman with Citizens.

[Mikhail Goberman, analyst]

Just a follow-up on an earlier theme, hypothetical scenario. Supposing this bond rally continues down into the 4% range and maybe even down to that sweet spot you mentioned earlier of 3 75. How do you guys see the interplay between the origination side of your business and the servicing side of your business, specifically how that would affect servicing earnings and valuations there?

[Mathew Ishbia, executive]

No, great question. I love what you're thinking because we talk about that stuff a lot. In a hypothetical and positive and optimistic situation where the tenure drops to 400 or 3 75 and all of a sudden the rate drop with $2.5 trillion, $3 trillion of borrowers that are going to want to refinance and take advantage of while also making more affordable for purchases, which is why I think is a great thing for everybody. Yes, it's going to be massive. So what -- first thing you'll run across -- the only thing you're going to run on the interplay between MSR valuations and originations is just a timing issue. So if that hypothetical rate drop happened March 29, you're going to have a huge write-down of MSRs and you won't have a huge write-up of originations until the second -- the next quarter.

Now if it happens on April 1, as an example, then you're going to -- there's going to -- there's not going to be a big interplay, it's going to be like, hey, we made $800 million this quarter of originations, and we had a write-down of $500 million of MSRs and it's like, okay, and you understand what it is and you see replenishing that MSR book. So that's how we look at it. But I look at it as a huge opportunity because volumes and margins will go up.

Now other players back to my comment earlier, we talked about, other players have that same dynamic you've got servicing book, but they're not prepared to do that $60 billion in the quarter at a higher margin to be able to take advantage of it. So you kind of are going to get flat -- be flat across the board. We're prepared to double originations, make the profits huge. Obviously, you have MSR write-down, which once again, I don't pay attention to because it doesn't really -- I can't run that, I can't control that. I can control our business and we prepare for everything else. And so we feel really good about that, but that's also why selling MSRs makes sense because you never know what's going to happen. People don't like selling MSRs because they can't originate them. But we can originate them and we make them every single day, so we feel good about that.

[Jeffrey Adelson, analyst]

Great. Thanks, Matt. Best of luck going forward.

[Operator]

And that will wrap up the Q&A portion. I would like to turn the call back over to Matt Ishbia for closing comments.

[Mathew Ishbia, executive]

Thank you for joining. Hopefully, some of you had some value on vision. We look forward to talking to you next quarter. A lot of good things happening. We're very excited about what's happening at UWM, and we appreciate the support and partnership with all of you guys. Have a fantastic day.

[Operator]

This concludes today's conference call, and you may now disconnect.