UWM to accept crypto for mortgage

UWM CEO Mat Ishbia, joins Yahoo Finance to discuss United Wholesale Mortgage’s pursuit for growth within its industry and how the company’s adoption of accepting Bitcoin for mortgage payments could benefit them in the long-term.

Video transcript

JULIE HYMAN: United Hotel Mortgage reported its earnings a couple days ago. The stock fell yesterday. It's bouncing back a little bit this morning. Let's dig more into the numbers, as well as the outlook for the company. Mat Ishbia is with us. He is UWM CEO. Mat, it's good to see you again. I want to talk-- I want to get right into it here and talk margins with you. Because there has been, really, this sort of war between you and competitors for brokers, for mortgage brokers.

You have been very successful in holding on to your core mortgage brokers. But it's come at a cost. And so, at what point does that cost become too much? The street maybe thought it was a little too much last quarter. How are you guys viewing it?

MAT ISHBIA: Yeah, well, thanks for having me. Not at all, there's no cost in my mind that is an issue at all. People are looking at the margins the wrong way. They just don't understand the business and how we're doing things. And so UWM is in a growth mode. We've grown. We've consistently grown. We also pay a dividend. We make a whole lot of money. If you take our core earnings, over 350 million in the second quarter, a lot of money coming in.

We're paying out a big dividend to everyone every quarter. We make plenty of money. Because our technology is better than everyone else's, so our cost to originate is lower. It's part of a strategy. The strategy is, let's lower the margins. Because I control the margin, every single day, me personally control the margin. I lowered the margins to grow our business, get more clients in with us, help our clients grow their business against the retail competitors.

And it's helping the broker channel grow. As that pie gets bigger, UWM continues to grow. We closed the gap on the number one lender substantially. And at the same time, everyone else that we compete with went down in the second quarter. We went up. We are growing. And it's all part of a strategy. It's very controlled, very understood. And it's working, actually, better than expected.

BRIAN SOZZI: Mat, we've been getting some weakish reads on the housing market. We've gotten some more weakish reads this morning. Are your margins going to be up for the balance of this year, in spite of those numbers?

MAT ISHBIA: Our business is going to be up, that's for sure. And our margins, I think I guided to basically about similar ranges. But I think they'll be slightly higher than what we did last quarter. But the reality is this, it's all part of a strategy. And there's so many purchases. We did $24 billion of purchases in the second quarter, which is by far and away bigger than anyone. So watch what happens when rates go up more.

So will the market slow down a little bit? I know, you know, home sales and other things, maybe you think it's going to cool off. We think there's going to be a lot of opportunity. The third and fourth quarter will be the best second half of the year of all time for UWM. We're doing more business in '21 than we did in '20. And so we're excited about it. I don't think anything in the housing market's going to cool off for what we do here at UWM with our partnership with our brokers.

BRIAN SOZZI: Looking at the stock, Mat, it's been under pressure, I believe cut more in half relative to late December. Now, you've gotten big discussion on the earnings call about ways you may look to reward shareholders moving forward. You said you were looking at some creative ways. Can you break them down for us?

MAT ISHBIA: Yeah, what we look at things, how do we help our customers? How do we help our clients? How do I take care of my team members and my shareholders? So all four people are at the table. We make sure we take care of everybody. And so we've authorized the share buyback of up to 300 million. I'm obviously conscientious of the float. Because I have a lot of shareholders that want us to have more float out there, so some of the big institutions can come in.

So we buy more at these prices. These prices are very low, obviously with a big dividend coming out. And so we're doing a lot of different things. But we have some big technology, some big things. I talked about us coming out with crypto. I talked about some things we're doing to help FindAMortgageBroker.com, help more consumers be educated on how to get a loan.

We have some big tech coming into the third quarter, which will hopefully drive, not only our best quarter of all time, which I think we have a good shot at doing from a volume perspective, but also really catapult us into the second half of the year and understanding how we can continue to grow and succeed in the eyes of shareholders, by doing things such as capital-- returning capital, whether it's dividend, buybacks, or other ideas.

JULIE HYMAN: So, Mat, let's get into the crypto, the crypto headline for just a moment here. I mean, we recently saw the likes of AMC say it's going to accept crypto, which I think, safe to say, that our team here read it as a way to get headlines. Is anyone really going to use crypto to buy a house? Do you want that crypto on your balance sheet? Like talk to me about the mechanics of this.

MAT ISHBIA: Yeah. So thank. Yeah, so I definitely don't need any extra headlines. I think you guys do a great job of talking about us and talking about our business and what we're doing, as we're the number two overall mortgage company in America. But the reality is this, we are a leader. We're an innovator. We are the best tech company in the mortgage base by a wide margin. And so, you know, everyone likes to do things the way they've always done it.

At UWM, we think about, what's best way? People aren't buying crypto, using crypto to buy a home. We're saying, can you make your mortgage payment? Almost a million consumers pay UWM every single month. And so, hey, we have a lot of consumers that have a lot of crypto. They'd like to be able to transfer iti n. How do we do that? And so we said, hey, listen, we're digging in deep. We are always a leader. I'm not going to sit here and wait for everyone else to do it and then follow.

We're the leaders. We have 1,200 tech people. We have the best innovation team in the country. And we're going to continue to be a leader. And so crypto is just one example. I'm looking at NFTs. We're doing some things with bots. We're doing a lot of things on the tech side that people just don't understand, because they think mortgage is old and sleepy. That's not how UWM is. That's not how we are. And that's not how mortgage brokers are either.

JULIE HYMAN: OK. So Mat, let me ask you then, if people are paying, if they're going to end up paying their mortgage in crypto, do you hold-- do you end up hanging on to that crypto on your balance sheet? Do you want crypto on your balance sheet? How will that work?

MAT ISHBIA: Yeah, so we're looking at all those things. But the reality is probably not. We're not looking to be an investor in crypto. What we're looking to do is provide access to our clients. And so we'd convert it to cash and figure out how to do it in the most appropriate way at the time. And so we're not looking to change our business. Our business is let's dominate the mortgage space. Let's grow. Let's lower margins, help mortgage brokers grow, all these things.

But also, we have to be conscious of a million people, you know, a lot of those people would like to pay in crypto, wouldn't have to like to convert themselves. We can do some things for them and say-- so I said, we're digging in. We're digging in a lot of technology, and we're going to continue to innovate.

JULIE HYMAN: Well, we look forward to catching up with you soon, find out how many people are doing that, and get some more insight into those other creative solutions that you're talking about, Mat. Good to catch up, Mat Ishbia of UWM.