United Wholesale Mortgage's service customers could potentially make their monthly payments in digital currency, Chairman and CEO Mat Ishbia said on the earnings call for the third quarter.
"We've reviewed the feasibility and look forward to being the first mortgage lender in America to accept cryptocurrency to make mortgage payments," said Ishbia. "That's what we've been working on. We're excited that, hopefully in the third quarter, we can actually do this before anyone else in the country because we are leaders in technology and innovation."
The United States is lagging behind other countries when it comes to this type of digital payment. In July, for example, a bill was introduced in Spain that allows mortgage payments in crypto.
Ishbia did not talk about what type of cryptocurrency UWM would accept on the call as the project is still in its early stages. But in a published report, he said it would likely be Bitcoin first, and the company is looking into others as well.
Referring to the company's second quarter results, he noted that changing the volume of purchases, not the proportion of origination, is how investors should value a mortgage company.
"It's important to know that less refinancing can only change the shopping mix and that's really not the story we're trying to tell, it's trying to talk about the strength of our business," said Ishbia.
So the second quarter, when the average mortgage rate rose from 2.8% to 2.99%, was a glimpse into the future. "So, just about a 19 basis point rise in interest rates, and you thought the entire industry was going to close depending on how many people responded," Ishbia said. "Wait for it to climb from 2.99% to 4% and you will see the strength of our business across the board."
Although UWM's sales margin profit was only 81 basis points in the second quarter, its origination cost was 43 basis points. "These are basically all small margins," he said. "We will continue to win at our costs and can continue to put pressure on all of our competition."
For the third quarter, UWM expects a total volume of 52 to 57 billion US dollars with a margin between 75 bps and 100 bps.
UWM reintroduced prime jumbo mortgages to its product mix in March, reaching an average volume of around $ 2 billion per month in the second quarter.
The "nice part," he added, was that the $ 3.2 billion purchases were more than half the volume of this product compared to $ 2.7 billion at Refis.
Jumbo products also added to the company's interest income in the second quarter, which rose to $ 79.2 million from $ 45.9 million in the previous fiscal year.