Aug 13, 2026
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Add us on GoogleUnited Wholesale Mortgage (UWM) CEO Mat Ishbia and his brother agreed in December 2022 to buy control of the Phoenix Suns NBA team and Phoenix Mercury WNBA team for $4 billion, a record for a National Basketball Association franchise at the time. Last week, the mortgage company that built that fortune took a rescue package from Oaktree Capital Management, a firm that lends to companies in distress.
UWM, the U.S.’s largest mortgage lender, spent three months this spring, losing $603.2 million on a position in interest rate derivatives. Its second-quarter filing with the U.S. Securities and Exchange Commission (SEC) shows the hit turned an ordinary quarter into a $451.9-million net loss. The same day, the company suspended its dividend and announced a $2.05-billion capital injection.
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None of this changes consumers’ mortgage loans — but it says a lot about the company that issues them.
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How the $603 million disappeared
UWM signed a deal on Dec. 17, 2025, to buy Two Harbors Investment Corp. for about $1.3 billion in stock. Two Harbors is a real estate investment trust built around mortgage servicing rights (MSRs) — the contracts that let a company collect your monthly payment and keep a thin slice of it.
Servicing rights pay out over time — the longer you keep your loan, the longer the fees keep coming. So when rates drop and everyone refinances, those loans vanish and the fee stream goes with them.
That normally sorts itself out at UWM. A refinancing boom costs the company on the servicing side, but it makes the money back by writing all those new loans. So it doesn’t normally hedge.
Buying Two Harbors would have roughly doubled UWM’s servicing portfolio, so the company put on a hedge against the book it was about to buy.
It didn’t work out. The 10-year Treasury yield rose instead, and the position moved against UWM. Two Harbors then terminated the UWM agreement in March and accepted a cash offer from CrossCountry Mortgage.
UWM is now going after Two Harbors in court, suing for more than $500 million over alleged breach of contract and fraud. Two Harbors called the suit frivolous and said the portfolio was already hedged and never belonged to UWM. Separately, a law firm has opened an investigation into possible securities violations.
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What the rescue costs
Oaktree put in $1.5 billion and an Ishbia family vehicle added $150 million. A planned $400-million rights offering to existing shareholders would make up the rest of the $2.05 billion. UWM is paying a lot for it.
The $1.65 billion comes as preferred equity that costs 10% a year in cash. If UWM doesn’t pay in cash, the rate rises to 13%.[a]
Then there’s the exit. If UWM wants to buy Oaktree out, it pays a premium on top — it starts at 10% and adds 10 percentage points every year after that, reaching 60% at the beginning of the sixth year. The longer UWM holds the money, the more it costs to hand back.
Ishbia knows how it looks. “I’m sure we could have gotten cheaper capital elsewhere,” he told analysts, arguing Oaktree brings mortgage expertise a cheaper lender wouldn’t.
Shareholders pick up the rest of the tab. The deal hands over 330 million warrants — the right to buy UWM shares later at $2 or $6 apiece. The market got the message fast. Shares dropped 35% on Aug. 6 to close at $1.19, dipping to 93 cents along the way.
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Oaktree got more than a good rate. It can block changes to senior management and the bylaws, put two people on the board, and force UWM to buy it out after seven years and walk away with at least $600 million, according to The Wall Street Journal. And if UWM ever misses those preferred payments, Oaktree takes control of the board.
Where this leaves you if UWM holds your loan
None of this touches your mortgage. Your rate, your balance, your payoff date are all locked in. A lender’s bad quarter doesn’t reopen a contract you already signed.
What might change is who you send the check to. UWM is moving servicing onto its own platform right now, so a letter could land in your mailbox for reasons that have nothing to do with the loss. If it does, you should get at least 15 days’ notice before the switch, and for 60 days afterward, a payment you sent on time to the old company can’t be called late.
So keep the letters. Switch your autopay on the date they give you, not before. If something looks wrong on your statements, write to both the old and new servicer and complain to the Consumer Financial Protection Bureau (CFPB).
The paperwork protects you, so the stock chart is someone else’s problem.
[a]Attached here: The preferred capital pays a cumulative 10% annual return when paid in cash. If UWM does not make the payment in cash, the rate increases to 13%, compounds quarterly, and is added to the preferred stock’s stated value.
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