UWM Holdings plans $70B-$80B sale of mortgage servicing rights
What happened
UWM Holdings plans to sell between $70 billion and $80 billion of mortgage servicing rights. The company will use the proceeds, along with funds from a stock rights offering, to pay down debt. The sale is expected to bring in $1.8 billion, with the rights offering potentially adding another $400 million in gross proceeds.
Why it matters
The sale is intended to help UWM Holdings manage its leverage and reduce its MSR portfolio unpaid principal balance to $210 billion-$230 billion by year-end. Analysts noted that the expected valuation of the sold MSRs is 240 basis points, which is above the estimated carrying value.
Who's involved
- UWM HoldingsWholesale Mortgage Lender planning the sale of servicing rights
- Keefe, Bruyette & WoodsInvestment bank that analyzed UWM Holdings' MSR portfolio
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- UWM HoldingsSpeculative
UWM Holdings might reduce its debt costs by using the sale proceeds to pay down outstanding debt.
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The entities involved
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UWM Holdings
Wholesale Mortgage Lender
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Keefe, Bruyette & Woods
investment bank
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