Five words in UWM's own investor deck explain the whole $603 million loss.

"Exposure it expected to assume."

That's their language, not mine. The full sentence: UWM recognized a $603M Q2'26 derivative loss tied to exposure it expected to assume in connection with the Two Harbors transaction.

Expected to assume.

A hedge offsets an exposure you have. You own something, its value can move against you, so you buy protection. That's the entire concept. It's the only thing a hedge does.

UWM never owned Two Harbors. They bid, they lost, CrossCountry won. And Two Harbors was a separate public company running its own hedges on its own book the whole time.

So there was no exposure to offset. There was a position, taken in anticipation of owning something they never owned.

Richard Christopher Whalen got there independently this morning in The Institutional Risk Analyst, and put it better than I have:

"UWMC will tell you that they were proactively hedging the servicing, but you don't hedge something you don't own."

He also notes the deck opens by calling the collapse of the deal a source of "optionality to deploy capital into alternative initiatives." Whalen's read on that: "Mat has handed the company to a private credit firm."

And then he says the part I haven't even said yet. That the UWMC board has a duty to ask for Mat Ishbia's resignation, should ask Howard Marks to chair the board, and should either run a CEO search or pursue a sale.

This is from someone who has spent a career reading these balance sheets and has no dog in this fight.

Read Whalen's piece. He also covers PennyMac missing badly, loanDepot quietly buying its own debt back at 80 cents on the dollar, and Rocket having its best quarter in four years. It's the clearest picture of this earnings season anyone has published.

You can read it here.

Say it out loud, because it did not exist this morning.

The Northeast Ohio Mortgage Bankers Association. 🍻

Ten weeks ago this was a Zoom call with ten people on it and a Google Form I built at my kitchen table. Tonight it has a president, three officers, twenty-one trustees and a seat on the statewide board.

Your founding executive committee ...

Courtney DeMarco, CrossCountry Mortgage, President
Tom Gallucci, Xactus, Vice President
William Dawes, Fairway Independent Mortgage, Secretary
Dawn Locigno, MGIC, Treasurer

And twenty-one trustees who volunteered for a thing that did not exist ...

Michael Cole, Kevin Conte, CPA, Bill Damm, Katie Daum, Rocco DeStefanis, Todd Donley, Bill Feller, Kristin Prochazka-Golab, CPA, Kelley Grealis, CMB, Sean Hadley, Jodi Hall, Donald Jarecki, Loretta Jones, Matt Koch, Beth Lang, Tony Lucarelli, Kyle McCort, Jim Riedl (LION), Stephanie Shafer, Susan Shaffer, CMB, AMP and Darren Zeck.

Twenty-five people. Excited. Before we have done a single thing.

Back in July we surveyed the founding group and asked what this organization should actually be for. I want to share the results, because they surprised me and they should probably surprise you too.

Connection finished first. Advocacy second. Education third. Leadership development fourth.

So here is what we are building. Rooms. Actual ones, with actual people in them, that a branch manager can afford to attend without a corporate approval chain. Monthly. Some virtual, most not.

None of this came out of nowhere. For more than twenty years the Mortgage Society of Ohio carried this community, and Bill Feller, Bill Damm and Paul Skerlong did the thing almost no volunteer leader ever does. Instead of letting it fade out quietly, they handed off the baton on purpose. Their last event was the Sleepy Hollow golf outing in June. Two of the three are on this board tonight.

Northeast Ohio means Northeast Ohio, on purpose. Cleveland, Akron, Canton, Youngstown, Lorain, the Mahoning Valley. If you lend here, this is yours.

Coming up: a charitable partnership with Greater Cleveland Habitat for Humanity, picked by our founding group in a landslide. Monthly meetings starting this month. Our founding board meeting coming soon, where all of it becomes official. And in-person events that are affordable and drivable. Coming soon!

If you are in mortgage banking in Northeast Ohio and you want in, comment below or send me a note. There is no waiting list and there is no velvet rope.

There is a lot of work and a lot of good people.

Most mortgage tech events sell the stage to the highest bidder. That is the whole business model and nobody says it out loud. Jodi Hall and The Mortgage Collaborative built something different.

Vendors pay to present. That is how these events get funded across our entire industry.

Jodi built the act Tech Summit backwards from that.

A lender Review Council vetted the solutions before anybody got a slot. The showcases are set up so lenders question and pressure test what they are seeing instead of sitting through a pitch. Origination Demo Alley gives them real time with providers on implementation, support and workflow fit, which is where this stuff actually lives or dies. And lenders do not have to be TMC members to attend.

Every one of those choices costs TMC something in the short run. A council that can reject a paying presenter costs revenue. Opening the doors to non-members gives away part of the membership pitch. She made them anyway, because members kept telling her that evaluating technology was eating their teams alive, and she went after that problem instead of the easier one.

This Wednesday and Thursday, The Highland in Dallas! If you own tech strategy at a lender and your stack decisions have been stuck because nobody has the hours to evaluate anything, this is two days that buys you back a quarter.

We just added four more names to Home for the Holidays, and it's official: this lineup has gotten ridiculous.

Still $395. Not $395 for the ticket and then $80 a plate. $395 for all of it. Meals, parties, two-plus days of massive names from inside mortgage and outside it. This is quickly becoming one of the biggest stages this industry has ever built. And one of the biggest Christmas party it's ever thrown.

This becomes a $795 to $995 conference. Probably soon.

Here's some of the new commits, with more coming:

Lisa Ingram, President and CEO of White Castle.

White Castle invented fast food. Not the slider. Fast food. They opened in 1921 as the world's first fast food hamburger chain, and everyone who came after them franchised and got bigger. White Castle never did, because franchising meant giving up control of the experience. 105 years later they are still family owned, still private, still run by the Ingrams, and headquartered right here in Columbus since 1936.

Read that again if you run a mortgage company or want to. They invented the category, watched competitors lap them on size, and chose the long game anyway. They are still standing.

Lisa Ingram is the fourth generation and only the fourth CEO in company history. Two numbers for an industry that cannot keep good talent: White Castle general managers average ten to twenty years with the company, and turnover is under five percent.

She's a marathon runner and she runs the business the same way: never turn away from what pays off long term just because the short term hurts. Her family has done that through the Depression, a world war, beef rationing, and every competitor that tried to bury them. If you lived through the last three years in this business, you want to hear what she has to say.

Also now confirmed as joining us ...

Stan Middleman, Founder and CEO of Freedom Mortgage. One of the most successful founders this industry has ever produced, and he is doing a one on one fireside. He operates on a different level. And is one of the owners of the Philadelphia Phillies.

Dan Snyder, CEO of Lower. Columbus built, and one of the most interesting growth stories in American lending.

Brian Vieaux, CMB, President of Mismo. The man who sets the data standards the entire business runs on.

And they join a lineup already stacked ... and we are over four months out with a litany of additional big names inside and outside the industry to be added.

Ross Bjork, Athletic Director at The Ohio State University. Jodi Hall, President and CEO of The Mortgage Collaborative. Dustin Owen, CMB®, AMP. Dave Savage. Kristin Messerli. Erin Dee, MBA of BankSouth Mortgage. Jennifer McGuinness-Lubbert. Eric Roman of Nations Lending. James Sias of Fifth Third.

Venue reveal is coming later this week, and it is a good one.

December 6 to 8. Columbus, Ohio.

Still $395. With this lineup we have earned the right to raise it, and we are going to. If you have been waiting, stop waiting and get down!

Burger King overtakes Wendy’s as America’s second biggest burger chain

#1 McDonalds sacks their CEO after value meals flop

The new class of NFL Hall of Famers

Not a great July jobs report

Mortgage rates still suck

It’s becoming more obvious we’ll never strike a deal with Iran

The BEST advice you will hear all summer

AUGUST

Aug 12 - Consumer Price Index (CPI) inflation reading
Aug 13 - Producer Price Index (PPI) inflation reading
Aug 13 - Originator Connect, Las Vegas
Aug 26 - NATIONAL DOG DAY
Aug 27-29 - Fed Jackson Hole Retreat (Warsh's first as Chair, and the one to watch after three dissents in July)
Aug 28 - FINAL NFL ROSTER CUTS FOR REGULAR SEASON!
Aug 29 - COLLEGE FOOTBALL RETURNS!
Aug 30 - US Open Tennis Tournament begins

SEPTEMBER

Sept 1 - JOLTS for July
Sept 4 - August Jobs Report
Sept 7 - Labor Day
Sept 9 - NFL SEASON KICKOFF, Seahawks host Patriots in the Super Bowl LX rematch (a Wednesday, not the usual Thursday)
Sept 10 - Producer Price Index (PPI) inflation reading
Sept 11 - Consumer Price Index (CPI) inflation reading
Sept 13 - US OPEN TENNIS FINAL
Sept 14 - 78TH PRIMETIME EMMY AWARDS on NBC, going up against Chiefs vs Broncos on Monday Night Football
Sept 15 - OMBA NIGHT AT THE BALLPARK! Columbus Clippers party deck outing! Tickets here!
Sept 15-16 - FOMC MEETING, rate decision Wednesday the 16th
Sept 19 - INTERNATIONAL TALK LIKE A PIRATE DAY
Sept 19 - Oktoberfest begins in Munich
Sept 20-22 - Uniquely TMC, Austin TX
Sept 21 - OMBA GOLF OUTING, The Golf Club of Dublin, 9:00 AM shotgun start
Sept 24-27 - PRESIDENTS CUP at Medinah Country Club, Snedeker vs Ogilvy
Sept 27 - MLB REGULAR SEASON ENDS
Sept 27-29 - MBA Compliance and Risk Management Conference, Washington DC
Sept 29 - MLB POSTSEASON BEGINS
Sept 29 - NHL SEASON OPENS, first year of the 84-game schedule
Sept 29 - JOLTS for August
Sept 29 - NATIONAL COFFEE DAY

OCTOBER

Oct 2 - September Jobs Report
Oct 7 - September FOMC minutes released
Oct 10 - mPowering You: MBA's Summit for Women in Real Estate Finance, Chicago
Oct 11-14 - MBA ANNUAL CONVENTION AND EXPO, Hyatt Regency Chicago
Oct 12 - Columbus Day / Indigenous Peoples Day
Oct 14 - Consumer Price Index (CPI) inflation reading
Oct 14 - Fed Beige Book
Oct 14 - MBA Tech Exchange, Chicago
Oct 15 - Producer Price Index (PPI) inflation reading
Oct 16 - Import and Export Price Indexes
Oct 16 - NATIONAL BOSS'S DAY (your move, direct reports)
Oct 17 - SWEETEST DAY (invented in Cleveland in 1922, so Ohio gets the credit and the blame)
Oct 20 - NBA SEASON OPENS, Knicks raise the first banner in more than 50 years
Oct 23 - WORLD SERIES GAME 1
Oct 27-28 - FOMC MEETING, rate decision Wednesday the 28th
Oct 30 - Employment Cost Index, Q3
Oct 31 - HALLOWEEN, on a Saturday, and the night a World Series Game 7 would be played

“Only when the tide comes in do you realize who’s been swimming naked.” - Warren Buffett

Until the next one,
Swerb
[email protected]