UWM Holdings Corp
NYSE:UWMC
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UWM Holdings Corp
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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 speakers' remarks, there will be a question-and-answer session. [Operator Instructions]
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 and welcome to the first quarter of 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 Holding Corporation and United Wholesale Mortgage.
Thanks Blake. A lot of great things to discuss today. I first want to start the call by thanking the 6000 plus broker partners who were able to join us for UWM LIVE last week which was an amazing event. Also think a lot of analysts and investors, we’re able to come out and make it, I enjoy spending time with you and fielding to great questions over the couple of days we had together.
UWM LIVE is and amazing event that allows you to see and feel the growth momentum of the broker channel in one room. All those loan officers, broker owners 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 in the brokerage shell different because we can work together as a team. And are excited about the growth together. Hopefully everyone attends was able to see for themselves. 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 and we're here to help them grow and succeed. And it's happening together as a team. Before we 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, and it's still a tough time for most lenders.
This is a time when scale efficiencies, investment and technology and business strategy on 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 ‘24, ‘25 and beyond. I've never been more confident with our modeling strategy that I am today. Now, let's get into quarter.
We delivered $22.3 billion of overall production, which is the high end of our guidance. More importantly, the $19.2 billion of purchase buying 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 gentle declines for most in the industry.
Our gain margin was 92 basis points also at the higher end of the guidance and up from 51 basis points in the fourth quarter. We have controlled 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 lender in America when looking at purchases and refinances or 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 pro this HMDA data on average, consumers saved 94 hours by working with a mortgage broker and number goes up to $10,004 hours 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 consumer to get loan. And as we all know, the best place for a loan officer to work. And in addition to that, some of the best news is we're the number one mortgage ridge area in the country once again in the first quarter, helping consumers helping our brokers and we're continuing to win together as a team.
And we'll take a deeper dive into the financials. But before I pass, I want to give a couple of comments on the financial performance for the first quarter. As I previously mentioned, 92 basis points of margin and $22.3 billion in 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 the two distinct components of our reported financials, the income from loan production and servicing income and along with the MSR value, the value the MSR portfolio, because rates went down in Q4 to Q1 the write down for MSR book was large, this marked on is driven primarily by rates are outside of our control and non-cash gain loss.
We reported a net loss of $139 million. But at the same time, there's a fair value marked down of over $337 million. Operationally with higher margins. In great volumes, we actually made money and if you look at it, compared to Q1 of 2022, actually, core wise made more money operating than we did in 2022, which is still a good quote in the industry. Making money profitably right now is a big deal. And UWM is doing it and we're going to continue to do it going forward, UWN 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. And 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 and three years from now and how we continue to evaluate, continue to evolve. We have the capital, liquidity, technology, client relations and infrastructure in place to thrive regardless of cycles. And we are doing that right now. I'm going to turn over to Andrew, our CFO for more details.
Thanks, Matt 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 Matt mentioned, a 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 in 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 to bulk MSR sales as well as to excess servicing strip sales in Q1 and loans with a total UPB of approximately $98 billion and completed two additional MSR sales subsequent 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 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 31st, 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 and growing both the wholesale channel and our market share. Okay, I'll now turn things back over to our chairman and CEO Mat Ishbia be up for some closing remarks.
Thanks a lot, Andrew. And before I get into 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 at one time, close new construction, control your price from a technology we're 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 numbers get a loan.
And we'll do everything we can to support growing the channel we also appreciate the investor community and 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 continue 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 basis points 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 gonna keep winning together. We're now glad to take your question. I'm going to turn it back to the moderator.
[Operator Instructions]. Your first question comes from the line of Kyle Joseph with Jefferies. Please go ahead.
Hey, good morning, Mat and Andrew, thanks for taking my questions. On the on the margin front, obviously, Game On was very successful. And it was nice to see how quickly margins are normalized in the first quarter? Can you give us a sense for where you are? Obviously, we have your second quarter guidance, but longer term is this a steady state in terms of where you see your margins going?
Yeah, thanks for the question. Appreciate it. My quick perspective is, is I think you were you'd have been in UWM LIVE also. So, I think you know what, I kind of answered this similarly. But let me just give my thoughts is that in the tough times in the mortgage market, which we're seeing right now, we're actually winning.
And with that being said, I believe the margins in these trough times is probably more like 75 basis points to 100 basis points, which is where we guided towards, I think that's what you'll see, while the rest of the industry is laying people off the rest of the other companies or whether they're going out of business or making massive changes to their businesses, that will continue to happen.
And that's the margin level, that we’ll be in and so Game On, as you know, was a strategy that's been exceedingly successful. And it's continuing to be successful with what we've done. And as we talked about, we have complete control of our business always. And we told you what we would do. And that's where the margins are right now. And that's why we're guiding the same exact area for next quarter.
Got it? And then a follow-up for me, probably to Andrew, obviously, you guys did a nice job of enhancing the balance sheet and liquidity in the quarter, as we're thinking about leverage and in this rate environment is it around the 0.9 non funding debt to equity, a steady statement and things going forward?
Yeah, Kyle, it’s Andrew, thanks. Thanks for the question. I think that's where we've maintained sort of in the 50 to 100 from 0.5 to 1 ratio for the last several quarters. And I think less than 1 to 1 is likely where we target that, and where I would expect we have remained for the for the foreseeable future.
Got it. Thanks a lot for answering my questions.
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. But 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 the 30-year mortgage rate was to drop to say, 5%, from what, low sixes 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. And kind of your outlook for ‘24 as well?
Yeah, thanks for the question. Appreciate it. The so real quick on that is how impactful if rates drop 100 basis points your example on a 5% interest rates there's a good chance our business doubles and our margins are higher. That's not true. I explain to people that in ’24, ’25, ‘26 we’ll make multiple billion dollars is our expectation. It just depends on when that happens. I don't control rates.
Now with the flipside as a lot of people realize when rates go down slightly like they just did you take an MSR mark down we're, silly reporters out there, not you guys you are an analyst, you understand we'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 in a spill. It just silly people don't understand the business.
So, just realize that when that happens when rates dropped 100 basis points, volume could double, margins could go up. And we'd 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 and talking about will headline UWS loses money or UWM only makes this much money because they don't understand the business. And so that's kind of my perspective on it is. Yes, it'll be a massive, massive upward tick providing us rough [Indiscernible]
And 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. And as you saw, I'm guiding even to do more volume in the second quarter than the first quarter.
So, a lot of positive at UWM. So, it will help us significantly, but it'll help a lot of other people in the industry. And so early ‘24, mid ‘24, late ‘24s. I don't know when it's going to be but it's happening. We all understand that anyone 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.
Good morning. Your market share obviously grew last year, it looks like again, it grew in the first quarter. As you dial down in programs like Game On, do you think we could see the share? Dip a little. How do you see the share outlook?
Yeah, good question. 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, continue to join, you're starting to see some of that production come through certain see some of the success come through.
It's been fantastic. However, with that being said, your question on market share, we went from 32 to I think to 55%, in the wholesale channel, that was more than we expected. I said always with Game On, after Game On, which you went back to Game On, as you can see.
If our margins stayed in the 40% range, that'd be a massive success, I think you're going to see it higher than that is your point. And so, if we, 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 very tough market without the Game On pricing. And so 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 wasn't the fourth quarter.
Okay, great. Thanks. And then just on the MSR sales, was that done at carrying value with any gains or losses on the MSR sale?
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 comparing it to if you're looking at from December 31st, then there might be a loss that we'll get from the day we sold it, there might be some gains, I don't know the exact details on each deal, but it's hard to really track it. That's why we just it's all part of the fair value markdown, which is a $337 million mark down in. And in reality, if you take that out of the $130 million loss whatever the number is, we obviously, you can tell from a core earnings perspective that’s an amazing quarter.
As I pointed in my comments, even better than the first quarter. So, once again to reporters that don't know what they're talking about, I'm sure there's some of you guys listening, this 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 of this year than last year's first quarter. And on top of that we had less volume and lower margins, but still made more money. So, think about how we're doing that we're monitoring and managing our business beyond what other people are saying but headline news and couldn't be doesn't explain that stuff.
So, it's good for you to understand and see that that the first quarter has been extremely successful from that perspective.
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, wondering what size mortgage market are you managing the business for? And are there any particular areas of the business right lease or expense efficiencies of originations volumes come in lower than expected?
Yeah, so thanks for the question. I don't think origination volumes come in lower than expected. I think they're going to be as I've described, and it's going to be a great year from the way we look and manage the business. And so overall the mortgage market is definitely smaller than it was last year, in the year before. However, most lenders out there I've tried to right size their businesses. Our business has been pretty sized well and prepared for scale. And so, I'm more prepared for the future. And what the two questions ago was about the ‘24 and ‘25. And the dominance that we're going to have to show it that time.
And so like I said, I think we hired 100 plus people hired joining this week alone. And so we're hiring people, we're growing, we're preparing for doubling this business over the next couple of years, from the volumes that you're seeing right now. And I'd be shocked if that didn't happen.
Got it. And as a quick follow up on your MSR portfolio, you guys highlighted that delinquency rates in your servicing portfolio are lower than lower than, more than the industry average. That said, are there any pockets of the portfolio where you see risk rising? And, as the broader macro environment normalizes? Do you think you'll see a need to increase staffing and services to help to manage bone workouts and modifications?
No. So if you look at our delinquency rate, I think we were the lowest or one of the lowest, I'll say one of them, because 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 and 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 delinquencies out called one of the lowest. And one of the highest FICO scores of anyone in the market. And so, our loan quality will get hit a lot less than our delinquency get hit 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. So, I don't see it as a big thing. I think it's overblown. And I'm not as concerned about it, as maybe other people would be talking. But 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. But thank you for the question.
Thank you.
Your next question comes from the line of Eric Hagen with BTIG. Please go ahead.
Hi, 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 how you guys are thinking about that, too. Thanks.
Hey, thanks a lot, Eric. I appreciate the question. They're actually worse MSR sales in the quarter but to answer what I think we're trying to figure out is how big MSR book going to be? And so what I would tell you, I think it finished around 300 billion. And I always just tell people, we're originally an auto volume. I basically assume even with if we do MSR sales, if we don't do as our sales, I think the book basically stays plus or minus 10% to 15%, at where it's at right now. So could if we don't do any sales, it will grow 15% 20%, maybe. But if we do, if we do a bunch of sales, it could go down 10%-15%.
But 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 we'll call it 300. And that's what we're looking at going forward. So, 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 -- job for us on that, along with Blake and the team managing that. And so, looking at those numbers, our liquidity is in great position.
So, we don't need to sell any MSR, so our MSR book could grow. However, someone wants to offer us a good price, and is - 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 of UPB MSRs that you sold in the quarter was?
You know, it's not that clean? So, I don't know the exact number because it doesn't really represent it because there's sometimes you're not selling the UPB, you're selling the excess servicing. And so therefore, it's really not actually any UPB because I still hold the servicing, but I sold the access, which is a capital markets transaction, if you think of it that way. So, I don't have the exact like when I told you we did 20 billion, but we brought in 500 million say that, that math doesn't work out. That's kind of how I think about it. So, it's not apples to apples. And that's why I got to just look at the overall MSR book as hey, 300 billion plus or minus 10%-15%. And we are driving, pretty consistent in that number.
Yeah, 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, so we have our pipeline every day, we don't really take any risk on any of our pipeline. So, that's been a constant for years and years and years. And so we try to be risk free in that. And obviously, there's no there's always risk when you're hedging and trying to handle things in the capital markets. Well, the we had amazing capital markets team and feel really great about what we're doing there. So, 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.
Yeah, 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. So, 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, we have debt. And so the interest expense includes that debt. And so a lot of us have there, but we're doing self-warehousing with some of our excess cash to drive that number down. And we'll continue to do that and take advantage, that opportunity, because there's so much liquidity. And just sitting there, we're just sitting there looking at it.
So, how do we use it and Blake Kolo and his team and Andrew and his team do a great job of managing that. So, I think the interest expense versus the interest income, the fact that it's a positive number shows that we're doing a really great job managing that because remember, it's not just warehouse line. And loans, we got interest expense in there from, from our servicing, servicing from our, our debt that we have out there.
Yeah. That's really helpful. Thank you, guys.
[Operator Instructions]. 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. Just hoping to give some details as to what drove that?
One thing the reality, Doug, is we've been managing this for years, everyone thinks, everyone wants to comment every time. Oh, Mat's not laying anyone off, of course, not laying anyone off and while I'm actually hiring, but the G&A expenses, not just people, there's a lot of things we manage.
And once again, Andrew, our CFO does a heck of a job. And I'll let him make a comment here in a second. So, he can give any of his thoughts, in addition, but the reality is, we manage our costs. We manage our business, to the tee, to the dollar, understand everything we're spending. And it's not people, which everyone talked about a lot of times it's vendors.
Lot of time, it's negotiating new deals. And we've done a great job of that. And you'll actually see 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. And so, 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, first quarter, than last year's first quarter. And last year's first quarter, we did significantly more volume, more gain on sale.
So 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. So, Andrew, do you have any comments to throw in that? Maybe I didn't hit?
I think he covered it. Well, man, I think just on a sequential basis, I think it’s down partially there was there was a slight increase to our repurchase reserve in Q4 of last year. On a year-over-year basis it found a little bit, relatively flat, but Mat 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 Brett Suzy on for Kevin Barker. Thanks for taking my question. I see you guys continue to guide high production, stable margins. Most of our questions been answered just following up on Doug's question. With G&A coming down. How do you guys view expenses going forward?
Well, I guess my perspective, depending on how you look at this, the volumes going to go up. And so, there are a lot of expenses that are variable. So, some of those numbers will go up. Obviously, we're going to continue to manage and I just told you, we're hiring. So, some of those expenses will go up. But overall, the thing I focus on less and less on expenses. And more on are we profitable, and we're extremely profitable, the core earnings were great, especially in one of the hardest markets. Because now the first quarter was tough. But the fourth quarter ended. December was a slow month.
And so that really bleeds into the first quarter across the board. And so, 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, but I will not sacrifice, I'm not trying to save $1 Jump over dollars to pick up pennies. And so, I'm going to make sure we run our business the right way. And if I'm going to make investments in people, in technology and in business strategies, we're going to continue to do that.
So, 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. And I don't think you were there but you were at UWM LIVE, you'd have seen the broker channel, the camaraderie, the culture, the opportunity, the innovation, and the upside.
And I think you'll see some of that in the second quarter one of the great quarters I guided too. But on top of that, it's going to continue to roll and so expenses is important, but if it's one of the first five things I talked 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 questions.
Your final question comes from the line of Michael K. with Wells Fargo, please go ahead.
Hi, good morning. So, Q1 gain on sale margin of 92 basis points was towards the high end of your guidance last quarter. But for Q2, you're still guiding to that original 75 basis point to 100 basis point range. So, the question is, why aren't you? Why are you not taking more that keen on some momentum in Q1? And maybe top up the bottom end of that, Q2 gain on sale margin guidance? Is it more, control your own price program in Q2, or maybe other factors? Like trying to provide extra pricing support for the brokers and important per arm spring purchases? And or is this just more conservatism as you have a good track record of coming in toward the high end of guidance?
I don't know if it's conservatism I -- we always come up with our guidance, I'd say always, we always have been 10 quarters now I believe. Just like we were paying our dividend for 10 straight quarters. The way I look it as I'm guiding you what I think the numbers will be, margins can change, things can change up and down. We control how we price on a daily basis. But also there's different products have different margins, different opportunities, and more conventional, more government, more jumbo margins are different on those different loan sizes. And so, I think that 75 to 100 is a good number.
I would assume that's going to be in the middle of that number, could be on the little on the lower end or higher end. And that's why I give 25 basis points. But we make sure it's anything with a 23 billion to 30 billion, could we be on the low end of that at the middle or the high? Like that's, if I, if I felt really confident we'd be in a different part of it, I’d guide to a lower number. However, honestly, Michael, and you know me, like, I'm not that focused on, exactly those guys, I'm focused on running the business on a day-to-day basis.
I see an opportunity to do more volume and margins go down, but I'll do it, I see an opportunity to for margins, who take advantage of that and maybe we'll do less volume, there's a lot of things we do. But the reality of our business is we're running it for the broker success. We want to bring on more mortgage brokers to the channel, we want to help more brokers loan officers grow their business. And we can do that in many ways. As you saw at UMW LIVE, Michael, you were here, the training, the coaching, the opportunity to learn, that's available. But there's also things on price, there's also things on helping them do social media.
And so there's all of these things we're doing. And so, I guess a long way of saying I feel confident 23 billion to 30 billion, I feel confident 75 basis points to 100 basis points. And 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, now if the mortgage market comes out of the trough then I’d give the guidance up a little bit more. Or if it goes, if it changes in way, I'll move it up as we see fit.
But that's my best estimate at this point. 75-100 in ’23-’30. And I'm working -- we're working extremely hard to hit those targets, to make sure that we deliver what we tell you're going to deliver, like we have every single time I've spoke on these calls, and I plan on continuing to do.
So, 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. I’m just trying to understand that don't go, where would you go from like 92 basis points towards that low end?
Yeah, once again, it's -- there's a lot of things that vary, there's things that happened, maybe that pushed it off 92. That it could have made it is 78, this quarter. And this thing that can be made, next quarter could be 99 or 76. I have to give a range because gain on sale is not is 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 just goes through.
And so, I want to give a little bit of a range for you. And so, 75 to 100 I feel really strong about. And I will deliver that once again, so you can be confident in that. But to try to narrow me to the higher end or the lower end of the range. I'm not going to be able to do it for you, Michael, although I love -- and I appreciate the question 75 to 100, ‘23 to ‘30. And I'll deliver once again for the 11th straight quarter of what I told you.
Okay, thank you so much.
And you have a final follow up question from Bose George. Please go ahead.
Amen. This is actually Mike Smith on for Bose. Just kind of hit on the UWM LIVE but I was wondering if you could just touch on the opportunities and 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. And so yeah, I think Jumbo was one of those 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 in some banks, banks can offer Jumbo prices 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 to back off that strategy a little bit, which actually gives an opportunity upside for UWM in 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. But 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, like looking for high quality loans, that could be done faster, easier and cheaper, because brokers and findamortgagebroker.com, which is the website where consumers are going to is growing, And we want to continue to drive people there and educate them the fastest, easiest, cheapest way to get a mortgage through broker, they are the expert that will shop on your behalf.
And if I can add a couple more products Jumbo being one of them in a better product of Jumbo, will that help that website? Will that help brokers? Yes, yes. So, we are working on it. But 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. And I know that was last question I believe. And so I just want to 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 on a lot of you on this call I see saw. And so hopefully you guys feel that energy and that passion we have and the brokers have.
And so we're going to keep winning together. Q2 is going to be a heck of a quarter and we're excited to share with you. I'll be talking to you guys after quarter and you have anything in between, Blake's available. I'm available Andrew and our team. We appreciate you guys and girls, have a fantastic day.
This concludes today's conference call. You may now disconnect your line.