Good morning. My name is Sarah, and I will be your conference operator today. At this time, I would like to welcome everyone to the UWM Holdings Corporation first quarter 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by one on your telephone keypad. If at any time you would like to remove yourself from the queue, please re-press star one. Blake Kolo, you may now begin your conference.
Good morning. This is Blake Kolo, Chief Business Officer and Head of Investor Relations. Thank you for joining us. Welcome to the first quarter 2023 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. I will now turn the call over to Mat Ishbia, Chairman and CEO of UWM Holdings Corporation and United Wholesale Mortgage.
Thanks, Blake. A lot of great things to discuss today. I first wanna start the call by thanking the 6,000+ broker partners of ours that were able to join us for UWM LIVE! last week, which is an amazing event. Also, thank a lot of the analysts, investors who were able to come out and make it. You know, I generally enjoy spending time with you and fielding the great questions over the couple of days we had together. UWM LIVE! is an amazing event that allows you to see and feel the growth momentum of the broker channel in one room. All of those loan officers, broker owners, and even real estate agents flew out to Pontiac, Michigan on their own dime to get better, share ideas for success, and try to win together as a team.
This is what makes UWM and the broker channel different, we can work together as a team and are excited about the growth together. Hopefully, everyone attends was able to see for themselves how the combination of our culture, the amazing relationships we have with our broker partners uniquely positions us for growth and success is one of the main ingredients to our secret sauce here at UWM. It's all about the broker community winning, we are here to help them grow and succeed, it's happening together as a team. Before I get into the quarter, I want to take a few moments to address the current overall mortgage industry and market. Obviously, there's a lot going on in the industry, it's still a tough time for most lenders.
This is a time when scale, efficiencies, investment in technology, and business strategy around purchase are showing the winners separating from the rest. While others are having to adjust their business for the worse, UWM is hiring, innovating, and preparing for further growth in 2024, 2025 and beyond. I've never been more confident with our model and strategy than I am today. Let's get into quarter. We delivered $22.3 billion of overall production, which is the high end of our guidance. The $19.2 billion of purchase volume, which was a first quarter production purchase record for us. We've been very proud of these metrics, particularly in this rate environment and with the general declines for most in the industry.
Our gain margin was 92 basis points, also at the higher end of the guidance, up from 51 basis points in the fourth quarter. We have control of our business and are very happy with both our margin and volume in Q1. I also quickly want to provide some highlights of the 2022 HMDA data that was released in first quarter. This is the government data that trumps some of the self-reported industry data. For the full 2022 year, we were the number one overall mortgage loan in America when looking at purchases and refinances of single-family homes, which is the definition of residential lending. I'm proud of this because the positive impact it had on the consumers who chose to work with mortgage brokers.
Per this HMDA data, on average, consumers save $94 by working with a mortgage broker, and number goes up to $10,004 for minorities. These facts make me feel great about the positive impact we have on the consumers in America that choose to work with independent mortgage brokers. FindAMortgageBroker.com is becoming a great website where consumers are learning about the benefits of working with a mortgage broker. The data supports the broker channel is the best place for a consumer to get a loan, and as we all know, the best place for a loan officer to work. In addition to that, some of the best news is we're the number one mortgage originator in the country once again in the first quarter, helping consumers, helping our brokers, and we're continuing to win together as a team.
Andrew will take a deeper dive into the financials. Before I pass it on, I want to give a couple of comments on the financial performance from the first quarter. As I previously mentioned, 92 basis points of margin and $22.3 billion of production, which were both very good numbers, resulting in a favorable operating gain for the quarter. With that said, many of you are now aware of the two distinct components of our reported financials, the income from loan production and servicing income, and along with the MSR value, the value of the MSR portfolio. Rates went down in Q4 to Q1, the write-down of our MSR book was large. This markdown is driven primarily by rates that are outside of our control and non-cash gain loss.
We reported a net loss of $139 million. At the same time, there's a fair value markdown of over $337 million. Operationally, with higher margins and great volumes, we actually made money. If you look at it compared to Q1 of 2022, we actually core-wise made more money operating than we did in 2022, which is still a good quarter in the industry. Making money profitably right now is a big deal. UWM is doing it, and we're gonna continue to do it going forward. UWM has never been better positioned for the growth and success going forward. I think back to where we were in the first quarter of 2020. We are so much stronger today in all aspects of our business.
With that said, I'm confident we'll be saying the same thing again in 3 years from now on how we continue to evaluate, continue to evolve. UWM has the capital, liquidity, technology, client relationship, and infrastructure in place to thrive regardless of cycles, and we are doing that right now. I'm gonna turn it over to Andrew, our CFO, for more details.
Thanks, Mat. 2023 is off to a great start as we achieved strong mortgage loan production volume and experienced improved gain margin in the first quarter as compared to the last half of 2022. As Mat mentioned, the higher gain margin contributed to improved profitability before considering the impact of the decline in fair value of MSRs.
Our expenses moderated in Q1 as we continue to focus on prudent cost management. Excluding interest and servicing costs and other non-operational expenses, total expenses declined nearly $50 million, or 19% compared to the first quarter of 2022, which also contributed to our strong core operational performance in Q1 of 2023. During the first quarter, we continued to execute our plans to strengthen our balance sheet and improve liquidity. We completed two bulk MSR sales as well as two excess servicing strip sales in Q1 on loans with a total UPB of approximately $98 billion and completed two additional MSR sales subsequent to quarter end. Net cash proceeds approximated $650 million from MSR and excess sales in Q1.
In addition, we entered into a line of credit providing up to $500 million of borrowing capacity secured by our Ginnie Mae MSRs. This facility, along with the MSR facility secured by our Fannie and Freddie MSRs, provide up to $2 billion of borrowing capacity, of which only $500 million was drawn as of the end of the quarter. Considering available cash, self-warehouse, and remaining available borrowing capacity under our secured and unsecured lines of credit, our total liquidity increased to approximately $2.9 billion as of March 31, 2023, which is an approximate $800 million increase from the end of last year. We continue to believe the measures we have taken to enhance our liquidity and strengthen our balance sheet will allow for our continued investments in growing both the wholesale channel and our market share. Okay.
I'll now turn things back over to our Chairman and CEO, Mat Ishbia, for some closing remarks.
Thanks a lot, Andrew. Before I get into the Q&A, I want to hit on a couple of points before we go. First, we aren't stopping. We will continue to embrace every cycle of the mortgage industry, driving forward and winning together with the broker community. We will continue to launch new products, relevant products. We've rolled out many in the first quarter, whether it's technology, whether it's actual products like One-Time Close New Construction, Control Your Price from a technology. We are going to continue to innovate and win. There's no hidden agenda here. The broker channel is the best place for American consumer to get a mortgage. It's the fastest, easiest, cheapest way for consumers to get a loan, and we'll do everything we can to support growing the channel.
We also appreciate the investor community, for the 10th consecutive quarter, we're going to announce our $0.10 quarterly dividend. We want to continue to reward our shareholders, as I've said many times in the past, and I'm excited about the prospects of us continuing to do that going forward. In addition to that, the second quarter, we expect production to be between $23 billion and $30 billion, with our margins in the range of 75 to 100 basis points. UWM is winning. We're making income. We have great liquidity. Our technology and our culture are strong, and I've never been so excited about what we're doing compared to our competitors in the mortgage market. We're going to keep winning together. We're now glad to take your questions. I'm going to turn it back to the moderator.
At this time, I would like to remind everyone in order to ask a question, press star 1. If you wish to remove yourself, simply press star 1 again. Your first question comes from the line of Kyle Joseph with Jefferies. Please go ahead.
Good morning, Mat and Andrew. Thanks for taking my questions. On the margin front, obviously, Game On was very successful. It was nice to see, you know, how quickly margins normalized in the first quarter. Can you give us a sense for where you see, obviously we have your second quarter guidance, but, you know, longer term, is this kind of a steady state in terms of where you see your margins going?
Yeah, thanks for the question. Appreciate it. You know, my quick perspective is I think you were at UWM LIVE! also, so I think you know when I kind of answered this similarly, but let me just give you my thoughts, is that in the tough times in the mortgage market, which a lot of people are seeing right now, we're actually winning. With that being said, I believe the margins in these trough times is probably more like 75-100 basis points, which is where we guide it towards. I think that's what you'll see while the rest of our industry is laying people off, the rest of the other companies are, whether they're going out of business or making massive changes to their businesses, that will continue to happen.
That's kind of the margin level that it will be in. Game On, as you know, was a strategy that's been exceedingly successful, and it's continued to be successful with what we've done. As we talked about, we have complete control of our business always. We told you what we would do, that's kind of where the margins are right now. That's why we're guiding the same exact area for next quarter.
Got it. A follow-up from me to Andrew. Obviously, you guys did a nice job enhancing the balance sheet and liquidity in the quarter. As we're thinking about leverage and kind of in this rate environment, or is this kind of the around the 0.9 non-funding debt-to-equity kind of a steady state we should think about going forward?
Yeah, Kyle, it's Andrew. Thank-thanks for the question. I think that's where we've maintained sort of in the 50 to 100, you know, 0.5 to 1 ratio for the last several quarters. I think less than 1 to 1 is likely where we target that and where I would expect we would remain for the foreseeable future.
Got it. Thanks a lot for answering my question.
Your next question comes from the line of Steve Delaney with JMP Securities. Please go ahead.
Thanks. Good morning, Mat and Andrew. Congrats on meeting your production guidance. That should not be a surprise. Now that the Fed is done with rate hikes and futures is expecting materially lower rates in 2024.
How impactful do you think to your current business volumes if if the 30-year mortgage rate was to drop to say, you know, 5% from what low 6s or whatever right now? I mean, just how impactful is just 100 basis points, 150 basis points, Mat, is what I guess I'm asking. Kind of your outlook for 2024 as well.
Yeah. Thanks for the question. Appreciate it, Steve. real quick on that is how impactful. If rates drop 100 basis points, to your example, out of 5% interest rates, you know, there's a good chance our business doubles, and our margins are higher. That's why I try to explain to people that in 2024, 2025, 2026, we'll make multiple billion dollars, is our expectation. it just depends on when that happens. I don't control rates. with the flip side, as a lot of people realize, when, rates go down slightly like they just did, you take an MSR mark down where-
Yeah
... you know, silly reporters out there, not you guys as you're an analyst, you understand what you're talking about. Silly reporters say, "Oh, it looks like UWM lost money this quarter." We made a lot of money this quarter. The MSR mark going down $337 million. You know, it's just silly. People don't understand the business. Just realize that when that happens, when rates drop 100 basis points, volume could double, margins could go up, and we make exceedingly amount of money, excessive amount of money in a really profitable for our shareholders and do some great things. However, the MSR mark will go down, and I'm sure some reporters that don't know what they're doing talking about will headline UWM loses money or UWM only makes this much money because they don't understand the business.
That's kind of my perspective on it, is yes, it will be a massive uptick for volume, not just for us, but for everyone else. Actually, yes, it will help us. It will help a lot of other lenders even more because they're actually losing money right now and actually laying off people right now. We're hiring, and we're actually winning. As you saw, I'm guiding even to do more volume in the second quarter than the first quarter. A lot of positive at UWM. It will help us significantly, but it will help a lot of other people, the whole industry. Early 2024, mid 2024, late 2024, I don't know when it's going to be, but it's happening. We all understand that.
Anyone that understands the mortgage business or just the economy in general realizes that rates aren't going up too much more from all of our perspectives.
Well, thanks for that insight. Appreciate it.
Thank you.
Your next question comes from the line of Bose George with KBW. Please go ahead.
Yeah. Good morning. Your market share, you know, obviously grew last year. Looks like, again, grew in the first quarter. You know, as you dial down programs like Game On, do you think we could see the share, you know, dip a little? How do you sort of see the share outlook?
Yeah, good question. You know, my perspective, I think we're running around 30, 32% market share pre Game On. Game On was designed to help originators join the broker channel. It's been a massive success. Thousands of loan officers joining, continuing to join. You're starting to see some of that production come through, starting to see some of the success come through. It's been fantastic. However, with that being said, you know, with your question on market share, we went from 32, I think, to 55% in the wholesale channel. That was more than we expected. I said always that if with Game On, after Game On, which Q1 is after Game On, as you can see, if our margins stayed in the 40% range, that would be a massive success.
I think you're going to see it higher than that is your point. If we're in the 40%-45% range, then think about what we just did. We just went from 32% to 40%-45%, a massive market share gain in a, in a very tough market, without the Game On pricing. Just realizing that we're looking for it. If it stays in the 40% range, we think it's excessively successful. However, I think it's going to be even higher than that in the first quarter, just like it was in the fourth quarter.
Okay. Great. Thanks. Then just on the MSR sales, was that done at carrying value? Were there any sort of gains or losses on the MSR sale?
You know, it's really tough to tell. There's some losses. It just depends on what day you sell it and what day you're marking it and comparing it to. If you're looking at from December thirty-first, then there might be some losses. If you're looking from the day we sold it, there might be some gains. Like, I don't know the exact details on each deal, but it's hard to really track it. That's why it's all part of the fair value markdown, which is a $337 million markdown. In reality, if you take that out of the $130 million loss or whatever the number is, we obviously, you can tell from a core earnings perspective, had an amazing quarter. As I pointed in my comments, even better than the first quarter.
Once again, to the reporters that don't know what they're talking about, and I'm sure there's some of you guys listening. It shows that we made $450 million in the first quarter of last year, and this quarter we lost $130 million, whatever the number is. However, if you look at core earnings, we actually made more money in the first quarter this year than last year's first quarter. On top of that, we had less volume and lower margins, but I still made more money. Think about how we're doing that. We're monitoring and managing our business beyond what other people understand. Headline news and clickbait doesn't explain that stuff. It's good for you to understand and see that the first quarter has been extremely successful from that perspective.
Great. Thanks for that.
Your next question comes from the line of James Faucette with Morgan Stanley. Please go ahead.
Hi. Good morning. This is Blake Netter on the line for James. Thanks for taking my questions. First off, I'm wondering what size mortgage market are you managing the business for? Are there any particular areas of the business where you see opportunities for expense efficiencies if originations volumes come in lower than expected?
Yeah. Thanks for the question. I don't think origination volumes are coming in lower than expected. I think they're gonna be, as I've described, and I think it's gonna be a great year, from the way we look at and manage the business. The all around mortgage market is definitely smaller than it was last year and the year before. However, you know, most lenders out there have tried to right size their businesses. Our business has been pretty sized well and prepared for scale. I'm more prepared for the future. What the two questions ago was about the 2024 and 2025 and the dominance that we're gonna have to, you know, show at that time. Like I said, I think we hired 100+ people hired joining this week alone.
We're hiring people, we're growing, we're preparing for doubling this business over the next couple of years, right from the volumes that you're seeing right now. I'd be shocked if that didn't happen.
Got it. As a quick follow-up on your MSR portfolio, you guys highlighted that delinquency rates in your servicing portfolio are lower than the industry average. That said, are there any pockets of the portfolio where you see risk rising? You know, as the broader macro environment normalizes, do you think you'll see a need to increase staffing and servicing to help manage loan workouts and modifications?
No. If you look at our delinquency rate, I think we have the lowest or one of the lowest, I'll say one of 'em, 'cause I don't have everyone's data. One of the lowest delinquency rates in America. The loan quality. We still don't do loans that everyone else does. Everyone else goes to 580 FICO scores or 550 FICO scores. They're all digging deep to try to just get a couple loans. We're still at 620 FICO. We have the lowest delinquency rates or really low delinquency. I'll call it one of the lowest. One of the highest FICO scores of anyone in the market. Our loan quality will get hit a lot less than or our delinquency get hit a lot less than everyone else. Do I see it being a massive issue in the industry?
The answer is no. Even without us being on the more conservative side of the credit profile. I don't see it as a big thing. I think it's overblown. I'm not as concerned about it as maybe other people would be talking. In general, I think our book, our servicing book is strong. Our strategy is strong, and I feel really great about where we're at. Thank you for the question.
Thank you.
Your next question comes from the line of Eric Hagen with BTIG. Please go ahead.
Hey, thanks. Good morning. Hope you're doing well. I think a follow-up on the MSR. How are you guys thinking about the size of the MSR portfolio, what you consider to be maybe a sustainable and comfortable level for you to manage that, the composition of that portfolio? I don't think we saw any MSR sales in the quarter, but you know how you guys are thinking about that too. Thanks.
Hey, thanks a lot, Eric. I appreciate the question. There actually were some MSR sales in the quarter, but to answer, I think we're trying to figure out is how big our MSR book gonna be. What I would tell you, I think it finished around $300 billion, and I always just tell people, you know, we're originating a lot of volume. I basically assume even with if we do MSR sales, if we don't do MSR sales, I think the book basically stays plus or minus 10%-15% of where it's at right now. Could it if we don't do any sales, it will grow 15%, 20% maybe. If we do a bunch of sales, it could go down 10%, 15%.
Basically think $300 billion seems like a good target. I think we're at $297. If I could be, I could be off by slightly, but let's call it $300. That's kind of what we're looking at it going forward. I look at it as it's been pretty consistent with that number. Our liquidity is so strong right now that the need for selling MSRs is not there. As you can see, our cash position, which is a critical focus of ours, and Andrew does a heck of a job for us on that, along with Blake and the team, managing that. Looking at those numbers, our liquidity is in a great position, so we don't need to sell any MSR. Our MSR book could grow.
However, if someone wants to offer us a good price, and as we're opportunistic out there, we will do it, as long as we're doing the right things by our brokers and by our business and by our shareholders.
That's great detail. Can you say how many would be UPB of MSRs that you sold in the quarter was?
You know, it's not that clean, so I don't know the exact number 'cause it doesn't really represent it. 'Cause there's sometimes you're not selling the UPB, you're selling the excess servicing.
Sure
therefore, it's really not actually any UPB because I still hold the servicing, but I sold the excess, which is a capital markets transaction, if you think of it that way. I don't have the exact. Like, it wouldn't if I told you we did $20 billion, but we brought in $500 million to say that math doesn't work out. That's kind of how I think about it. It's not apples to apples, and that's why I gotta just look at the overall MSR book as, hey, $300 billion plus or minus 10%, 15%, and it'll drive me pretty consistent in that number.
Yep. Yep. That's really helpful. One more. How are you guys thinking about managing the interest rate risk in the origination pipeline? I guess both from the perspective of hedging the pipeline before delivery and anything you're doing maybe to mitigate the higher interest expense from holding loans on warehouse. Thanks, guys.
Yeah, I mean, we hedge our pipeline every day. We don't take any risk on any of our pipeline. That's been a constant for years and years and years. There, we try to be risk-free in that. Obviously there's always risk when you're hedging and trying to handle things in the capital markets world. We have an amazing capital markets team and feel really great about what we're doing there. That, that's kind of how I think about the that risk. I'm sorry, your second part of the question, Eric, if you're still on the line?
Just mitigating. Anything you guys are doing to mitigate the higher interest expense from holding loans on warehouse and the NIM that you're kind of earning there?
Yeah. I mean, the interest expense, I know it's hard to see it, but it's actually pretty low relative to the market. However, we have debt, the interest expense includes that debt. A lot of that's up there. We're doing self-warehousing with some of our excess cash to drive that number down. We'll continue to do that and take advantage of that opportunity because we have so much liquidity and it's just sitting there. We're just sitting there looking at it. How do we use it? Blake Kolo and his team and Andrew and his team do a great job of managing that. I think the interest expense versus interest income, the fact that it's a positive number shows that we're doing a really great job managing that.
Remember, it's not just warehouse line in loans, we got interest expense in there from not from our servicing, from our debt that we have out there.
Yep. That's really helpful. Thank you, guys.
Again, if you would like to ask a question, please press star one on your telephone keypad. Your next question comes from the line of Doug Harter with Credit Suisse. Please go ahead.
Thanks. This quarter looked like the G&A expense fell by a meaningful amount. I was just hoping you'd give some detail as to what drove that.
Well, I think the reality, Doug, is we've been managing this for years. Everyone kind of wants to comment every time, "Oh, Mat's not laying anyone off." Of course, we're not laying anyone off. We're actually hiring. The G&A expense is not just people. There's a lot of things we manage. Once again, Andrew, our CFO, does a heck of a job. I'll let him make a comment here in a second, so he can give you his thoughts in addition. The reality is, we manage our costs, we manage our business to the T, to the dollar, understand everything we're spending. It's not people, which everyone likes to talk about. A lot of times it's vendors. A lot of times it's negotiating new deals. We've done a great job of that.
You'll actually see that some of those things come through throughout the year that we've been working on, not just in the first quarter, but last year in the second, third, and fourth quarter. The way I look at it is, the most important thing, Doug, to look at is operating core income. We make more money this year's first quarter than last year's first quarter. In last year's first quarter, we did significantly more volume, more gain on sales. Obviously we're managing the business very well, and all these details are coming through in a positive way, as I said it would over the last four or five quarters I've been getting that question. Andrew, I don't know if you have any comments to throw in that I maybe I didn't hit.
I think you covered it well, Mat. I think just on a sequential basis, it's down, partially there was a slight increase to our repurchase reserve in Q4 of last year. On a year-over-year basis, it's down a little bit, relatively flat, but Mat's comments remain the same.
Okay. Thank you.
Your next question comes from the line of Kevin Barker with Piper Sandler. Please go ahead.
Hi, this is Brad Katusian with Kevin Barker. Thanks for taking my question. It's nice to see you guys continuing to guide the high production, stable margins. Most of my questions have been answered. Just following up on Doug's question, with G&A coming down, how do you guys view expenses going forward?
Well, you know, I guess my perspective, depending on how you look at this, the volume's gonna go up, right? There are a lot of our expenses that are variable, so some of those numbers will go up. Obviously, we're gonna continue to manage. I just told you we're hiring, so some of those expenses will go up. Overall, the thing I focus on less on expenses and more on are we profitable? We're extremely profitable. Core earnings were great, especially in one of the hardest markets. Because not only the first quarter was tough, but the fourth quarter ended in December was a slow month, and so that really bleeds into the first quarter across the board. I feel really good about it. Are we managing expenses? Yes.
Do I have more expenses that are coming out of the business that you guys... that aren't tied to anything besides vendors and partnerships and things we have outside? Yes. I will not sacrifice. I'm not trying to save $1, jump over dollars to pick up pennies. I'm gonna make sure we run our business the right way. If I'm gonna make investments in people, in technology, and in business strategies, we're gonna continue to do that. I spend very little time focused on expenses while we're making a lot of money. What I do focus on is how do we drive revenue and help our brokers grow their business. When the brokers grow, UWM grows, and that's what's happening. That's why I talked at the beginning of the call about UWM LIVE!
I don't think you were there, but if you were at UWM LIVE!, you would have seen the broker channel, the camaraderie, the culture, the opportunity, the innovation and the upside. I think you'll see some of that in the second quarter with it. We'll have a great quarter as I already guided to, but on top of that, it's gonna continue to roll. Expenses is important, but if it's one of the first five things I talk about, then I'm not doing my job as a CEO because I'm jumping over pennies or dollars picking up pennies, and that's not who we are and never who we will be.
Thanks for taking my question.
Your final question comes from the line of Michael K. with Wells Fargo. Please go ahead.
Hi. Good morning. The Q1 gain on sale margin, you know, of 92 basis points was towards the high end of your guidance last quarter. For Q2, you're still guiding to that original 75-100 basis point range. The question is, why are you not taking more of that gain on sale momentum in Q1 and maybe top up the bottom end of that Q2 gain on sale margin guidance? Is it more, you know, Control Your Price program in Q2 or maybe other factors, like trying to provide extra pricing support for the brokers in the important spring purchase season? Is this just more conservatism as you have a good track record of coming in toward the high end of guidance?
You know, I don't know if it's conservatism. We always come in with our guidance. I say always, but we always have been 10 quarters now, I believe, just like we've been paying our dividend for 10 straight quarters. The way I look at it is I'm guiding you what I think the numbers will be. You know, margins can change, things can change up and down. We control how we price on a daily basis. Also there's different products have different margins, different opportunities as you do more conventional, more government, more Jumbo. Margins are different on those different loan sizes. I think the 75-100 is a good number. I would assume that it's gonna be in the middle of that number. Could it be on the lower end or higher end?
That's why I guide, give 25 basis points. We make sure, same thing with the $23 billion-$30 billion. Could we be on the low end of that, at the middle or the high? Like, that's. If I felt really confident we'd be in a different part of it, I would, I'd guide a lower number. However, honestly, Michael, you know me, like, I'm not that focused on, you know, exactly those guys. I'm focused on running the business on a day-to-day basis. If I see an opportunity to do more volume and margins go down a little bit, I'll do it. If I see an opportunity for margins, we'll take advantage of that, and maybe we'll do a little less volume. There's a lot of things we do, but the reality of our business is we're running it for the broker's success.
We wanna bring on more mortgage brokers to the channel. We wanna help more brokers, loan officers grow their business, and we can do that in many ways. As you saw at UWM LIVE!, Michael, you were here, the training, the coaching, the opportunity to learn, that's available. There's also things on price. There's also things on helping them do social media. There's all these things we're doing. I guess a long way of saying I feel confident $23 billion-$30 billion. I feel confident 75-100 basis points. You know, as I said at the very beginning of this call, in the troughs of the mortgage industry, wholesale will be between 75 and 100. I think I said that last year, and I say it again this year.
If the mortgage market comes out of the trough, then I'll move the guidance up a little bit more, or if it changes in a way, I'll move it up as we see fit. That's my best estimate at this point, 75 to 100 and 23 to 30. We're working extremely hard to hit those targets to make sure that we deliver what we tell you we're gonna deliver, like we have every single time I've spoke on these calls, and I plan on continuing to do.
What would it take for you to be towards that bottom end of the guidance? You're saying it's more of mix or maybe you'll push pricing programs more. Just trying to understand the delta. Why would you go from, like, 92 basis points towards that low end?
Yeah. I mean, once again, there's a lot of things that vary. You know, there's things that happen maybe that pushed it up to 92% that it could have made it at 78% this quarter, right? There's things that could make it next quarter, it could be 99% or 76%, right? Though I have to give a range because gain on sale is not as clean. There's derivatives. There's a lot of different numbers coming in. There's a lot of different things. There's timing of issues when we sell loans. There's timing of hedges. There's market movements. It's a lot more complex than just like, hey, you put a number on a piece of paper, and it just goes through. I wanna give a little bit of a range for you.
75-100 I feel really strong about, and I will deliver that once again, so you can be confident in that. To try to narrow me to the higher end or the lower end of the range, I'm not gonna be able to do it for you, Michael. Although I love you, and I appreciate the question. 75-100, 23-30, and I'll deliver once again for the 11th straight quarter of what I told you.
Okay. Thank you so much.
You have a final follow-up question from Bose George. Please go ahead.
Hey, Mat. This is actually Mike Smith on for Bose. You kinda hit on this at UWM LIVE!. I was wondering if you could just touch on kind of the opportunities that in Jumbo or any other products for that matter, just with some of the stuff going on with banks. Thanks a lot.
Yeah. Thanks for the question. Appreciate it. Yeah, I think Jumbo is one of the spots that we're really focused on to hopefully help gain some opportunity for our broker community. The only reason a retail loan officer stays at a bank would be because, A, they can't generate any business themselves, or B, they do a lot of Jumbo loans, and sometimes banks can offer Jumbo product as a loss leader. I think with some of the bank failures recently, as we've talked about, I think some of the banks are gonna back off that strategy a little bit, which actually gives an opportunity upside for UWM and the broker community. How that will play out, I don't know, to be honest with you. As you know, it's a focus, and we'd like to figure it out. We don't have it solved yet.
With that being said, that's all upside because right now our Jumbo production is very low. On the product side in general, we're looking for high-quality loans that can be done faster, easier, and cheaper because brokers in FindAMortgageBroker.com, which is the website where consumers are going to, is growing. We wanna continue to drive people there and educate them. The fastest, easiest, cheapest way to get a mortgage is through a broker. They are the expert that will shop on your behalf. If I can add a couple more products, Jumbo being one of them, and a better product of Jumbo, will that help that website? Will that help brokers? Yes, yes. We are working on it.
At the same time, that's all upside because what you saw in the first quarter and what you see my guidance in the second quarter is assuming that that's not really solved by that time.
Great. That's helpful. Thanks a lot for taking the question.
Yeah. Thank you for the question. I know that was the last question, I believe. I just wanna say thank you to everyone who jumps on these calls. I appreciate your questions. I appreciate your thoughts. We appreciate all of you that came out to UWM LIVE! to really understand our culture and our team and the broker community. We're excessively, exceedingly, if that's a better word, excited about the broker community. The broker community is growing, and everyone that was at UWM LIVE!, and a lot of you on this call I see, saw it. Hopefully you guys feel that energy and that passion we have and the brokers have. We're gonna keep winning together. Q2 is gonna be a heck of a quarter, and we're excited to share with you.
I'll be talking to you guys after the quarter. If you ever need anything in between, you know, Blake's available. I'm available. Andrew and our team. We appreciate you guys. Gals, have a fantastic day.
This concludes today's conference call. You may now disconnect your line.