Stocks for US Mortgage Giant UWM Decline Despite Massive Profits in 2021

In some of the most profitable years since its inception, the leading US mortgage lender, UWM Holdings, reported a historic $1.4 billion profit in net income in 2020. This represents a whopping 822% profit, capping what seemed a sterling achievement.

Surprisingly, the massive profit margin wasn't enough to satisfy the company's investors. As a result, by early February 2021, the shares dropped by about 10% - reflecting investor diffidence. According to UWM Company spokesperson, the firm barely missed its 2020 profit projections by a tiny margin. The management expected UWM to achieve lower profit margins on its new mortgages in the quarter ending in March 2021. UWM is also known as Pontiac. In efforts to lure investors in September 2020, the UWM management had announced that the company expected to earn $200 billion in originations.

Despite this, a Wedbush Securities Analyst, Henry Coffey, expressed confidence, saying that Pontiac's quarterly performance was significantly strong. Interestingly, after a record-shattering 2020 performance, the UWM investors demonstrated nervousness about the company's future profitability prospects with regards to originating mortgages. This explained the significant decline in the company's share performance by early 2021.

On a more positive note, the UWM's CEO, Mr. Mat Ishbia indicated that his company's lending business would grow by a minimum of 15% in 2021. This disregarded the fact that other industry analysts expressed pessimism about the mortgage business's growth in 2021. In an interview, the CEO said that his company 'Was not even close to achieving all the refinances that ought to be in the market at this time.'

UWM is currently the US' topmost wholesale mortgage lender. In its position, UWM primarily offers funds for mortgages that loan brokers originally manage. In the last quarter, the company reported $ 54.7 billion in its loan originations. This means that the UWM's annual total equaled $ 182.5 billion.

In September 2020, UWM merged with Gore Holdings IV. The latter is well-known as a special purpose acquisition company. The pair gleefully enjoyed an unprecedented mortgage profit wave to achieve a $16 billion evaluation by the end of the period. In early 2021, UWM made its first public trading business on the New York Stock Exchange; by the debut week's close, the company had a market value worth more than $18 billion. In the upcoming quarter, the company management expects UWM to produce $52-57billion worth of new mortgages. Nevertheless, despite these successes, the management expects a significant run of performance. For instance, UWM strategically plans to capture at least 50% of the US wholesale market- to the detriment of its competitors.

Shortly before the company went public in a deal worth $16.1 billion (with SPAC), the CEO stated that observers would make a great mistake if they thought the company's performance would deteriorate. It soon became apparent that UWM was the biggest purchase lender in the entire US market. There was no doubt that UWM was far ahead of the competition-including Rocket Mortgage, its arch-rival. The CEO recently said that, with increased technological investment, UWM was set to rake in more profits in 2021.

Further, the CEO had this to say to indicate the reasons for his company's success: 'We have achieved a wonderful quarter-despite some decline- it's all been an amazing year. We, however, expect this to be our best year in history. I say this considering the mortgage volume prospects. As a company, we aim to focus on the fundamental business at hand. For us, the stock price only follows; it does not lead.' The CEO also explained that the stock price, rather than the 2020 record volume, was linked to 'a normal' year. He expressed optimism that the stock prices would rise to peak at about $13.50. For UWM, he said, the primary focus was business.

He further emphasized that they'd not allow the company's business in the broker channel to be interrupted by the usual fluctuations in the stock market prices. 'We must make the broker share go up, educate the people, and invest in technology. Yes, once we achieve this, the broker channel will undoubtedly grow. It does not matter whether the stock price is $20, $9, or $5; these factors have absolutely no impact on us.

The CEO was confident that on April 6, when the company gives its first dividend, the market dynamics will vindicate his optimism with the UWM's performance and projected growth.

Without a doubt, the Coronavirus pandemic ushered in a new normal, characterized by the 'work at home syndrome.' As a result, by the close of 2020, the value of hotel properties and office buildings in many of the world’s largest cities (like New York) fell sharply. This caused seismic rumbles and impacted stock prices. US economic experts now predict that the value of property taxes in New York City will decline sharply by as much as $2.5 billion. Not surprisingly, this represents the most significant decline since the 1990s.

Interestingly, analysts expect the post Covid- 19 situation to remain mostly the same- many people will (likely) continue to work at home. This also means that (after 2021) most office buildings in large cities like New York will remain unoccupied for a long time. According to a recent statement by New York City Mayor, Bill De Blasio, the sharp drop in the city's property value is directly attributed to the Covid- 19 pandemic effects. Clearly, most of the city’s buildings, hotels, and offices have remained empty since 2020; New York became a ghost city.

Further, according to the New York City Hall officials, the tax class market value (including hotels, office, and retail properties) has significantly fallen- by about 15.8%. Since real estate accounts for 50% of the city’s tax revenue, these figures will likely jeopardize City Hall’s budgetary prospects in the immediate future. Just like other US cities, New York has suffered unprecedented devastation since the Covid-19 pandemic arrived.

Some 26,000 people have died, the city lost billions of dollars (in expected tax revenue), and thousands of jobs. Moreover, unemployment rates exceeded 20% -at the worst point of the pandemic in 2020 and early 2021. Even though some businesses remained open, more than 500,000 residents of New York are unemployed. The city’s transport sector is adversely affected since most workers stay at home rather than travel to work.

Fortunately, it’s certainly not all doom and gloom; as the sages say, 'Behind every cloud is a silver lining'- analysts noted strange happenings throughout the Covid-19 pandemic months- the rich became more prosperous. Overall, this portends good news to the city- it means a higher prospect for increased income tax revenues.

Notably, New York Governor Andrew Cuomo and Mayor De Blasio consistently fought the Trump administration for 4 years, seeking federal aid. Both are optimistic that the newly installed Biden administration will change matters substantially. To brighten matters, the new US Senate Majority Leader, Chuck Schumer, recently announced that the incoming government would take over all Covid 19 disaster-related costs in the City and State.

The expected government intervention will let City Hall off the hook with regards to 25% of the federal emergency reimbursement costs. This also means New York State and city will save a whopping $2 billion. According to Mr. Schumer’s office, 'These savings will help plug the gaping Covid 19 related budget holes.' He says that this is 'a mere taste of better days ahead- coming out of Washington straight to New York.

Soon after Mr. Schumer’s encouraging revelation, US President Joe Biden announced a $1.9 trillion proposal to alleviate the ravages of the Covid-19 pandemic. Out of this, his administration sought to set aside $ 350 billion to assist state and local governments.

Significantly, according to Mr. Schumer, New York City’s exciting deal with the incoming government to cover 100% of the Covid-19 related emergency expense means that the city will receive approximately $1 billion (both for the state and city. The deal strikingly resembles the Obama administration's pact- where the current president served as Vice-President. While the Trump administration had severally committed to boosting this kind of arrangement, his government never acted effectively to implement it. As a result, this compelled New York City and State to cover 25% of such costs.

Thanks to the new aid, the New York City Hall can now put on hold its plans to cut nearly $200 million in the education budget. Moreover, it can halt a plan to cut $ 44 million in the mayor’s favorite pre-school program (this is popularly known as the '3-K for All.'). On his part, Mr. Cuomo, the Governor, expressed optimism that the federal government would help backfill the $ 15 billion shortfall. This is the largest shortfall in the entire history of New York State.

The US city of Baltimore has changed drastically over the years. As time moved, newer, more exciting spots for tourists visiting the city have been discovered. Even with this, it is not a secret that Baltimore has much more to offer. Indeed, the city has not yet attained its full potential. This is partly due to the influence of the city's working-class population. Regardless, if you want to get the ingredients for a modern tourist paradise, visit Baltimore. Here, you will find interesting shops, ethnic restaurants, museums, boutique hotels and restaurants.

In the Baltimore National Aquarium, visitors can enjoy plenty of marine life, especial if they naturally love to do this. The National Aquarium is famous as America's best centre of aquarium exhibition. You can find some 600 species of marine biological life here.

Visitors can always enjoy an exciting exploration of the beautiful aquatic ecosystem. In case you naturally love historical things, Baltimore city will not disappoint. You can readily visit the famous ancient ships found here. You will find some famous ships displayed on any day you visit. These will include the USS Torsk, the Taney, the USS Constellation and the Chesapeake, among others.

In the morning hours, you can spend some quality time at the Baltimore waterfronts. This is especially exciting on the first day of your tour. Later on, you can get to enjoy the cooling breeze on the beaches while sipping a drink of your choice. This is also the best time for you to take a stroll along the Inner Harbor. At such a time, the crowds are usually smaller.

In the afternoon, it is great to take a walk or ride on to Mt. Vernon. To reach here, you can take the route that strolls up the North Charles Street. After walking for some 20 minutes, you will pass by the legendary Baltimore Basilica. This ancient historic cathedral of the Roman Catholic Church was built in the 1800s. Many admires' hearts and minds have always been captured by the cathedral's grand neoclassical designs. The cathedral is built on a Mt Vernon historical site. It exists along with some left-overs of the 19th-century heritage buildings.

A highlight of this is a visit to the Washington Museum. It is a prominent point of the entire tour. Here, you will come across a statue of the founding President of America, George Washington. This is proudly erected within the city. After this, you can always take a hearty lunch at the Dooby's coffee restaurant. This popular café usually serves great dishes, including seafood dumplings, kimchi burger and the accented Asian roast pork noodle ramen. Most likely, you will get some excellent coffee and bakery featuring prominently on the menu as well.

You will discover many other historical attractions awaiting you on a visit to Baltimore. One of the best ways to start your journey off should be to visit the famous Walters Museum Art. This is a free exhibition centre that comes with vast art collections. These range from French impressionist crafts, woodblock prints of Japanese origin, renaissance paintings, and some Roman sculptures,

It is, undoubtedly, excellent advice for a visitor in this city to pass by the George Peabody Center Library. The library features a magnificent atrium architecture. This building spans five stories and is filled with more than 300,000 books that date from the 19th century. In the final hours of the afternoon, you may visit the Maryland Historic Society. Here, you will get a few old artefacts that have been carefully preserved for the last 400 years.

Later in the evening, you should make sure to visit the Fells point. This is an important hub in Baltimore for all matters touching on shipbuilding. Today, the place is dotted with many shops and restaurants. The trip atmosphere can now be spiced up by having an early drink at a lively bar nearby. The options for a delicious dinner are plenty. You can take a sumptuous meal at the popular Thames St Oyster House restaurant. You can get a memorable meal made of oysters done with cocktails.

Next, you can visit Federal Hill. One of the main attractions includes the Historic Shrine and the Fort McHenry Monument. This fort became quite famous in 1814 for surviving a British army naval attack. This is ultimately what inspired the composition of America's national anthem.

The COVID-19 pandemic has spread with alarming speed, infecting millions and bringing economic activity to a near-standstill as countries imposed tight restrictions on movement to halt the spread of the virus. The June 2020 Global Economic Prospects describes both the immediate and near-term outlook for the impact of the pandemic and the long-term damage it has dealt to prospects for growth. The baseline forecast envisions a 5.2 percent contraction in global GDP in 2020. What will the world look like after COVID-19? Many of the problems we will face in the next decade will simply be more extreme versions of those that we already confront today. We expect a rise of digital behavior such as remote working and online learning, video streaming and conferencing, telemedicine, and food delivery services.

Not long ago, some rather interesting things happened on the world economic front. At that time, popular stocks in the leading stock markets came to fall by about 20%. The stocks made an attempt to resuscitate, especially when the European central bank announced that there was a plan to improve things through collaboration with the Eurozone market. There was no indication of definite plans on how this would actually be done. Nevertheless, many celebrated this announcement with the hope that, at last, some light was coming out of the tunnel. A little dim, but a hopeful point, nonetheless.

Then other interesting things came. Like a thunderbolt, China announced a major decline in the national GDP by a whopping 6.9%. This was, apparently, the lowest decline in national fortunes for more than 25 years. Today, the leading world economic leaders are saying that this might affect the world in a way that is vastly unimaginable.

Have you ever thought about it? What is really common between China, oil and the steel industry? Plenty, some people say. In reality, these diverse entities may have several things in common: Anxious faces, unsteady guts and a nail-biting tendency. This is, perhaps, what they all share in common.

As we talk, you are probably planning to have a skiing session out on the slopes of the Alps in Switzerland, or some other fancy place. It is understandable that, at such times, you probably do not want to hear the term recession mentioned. Of course, if you are a banking mandarin planning to get more interest over money belonging to others, such a word is not welcome either.

Yes, who can doubt that China is today one of the world's secret superpowers? For this reason, if China is ridden with the smallest issues that some may think is not significant, the ballooning effect in the world economy could be truly devastating. They could be some huge challenges lurking on the way. The changes can be quite compelling as well. The trials might be both short-term and long term. In this situation, who will be able to lift his head out of the deep economic abyss?

Some also ask: What is really going on? Interestingly, some have made their case claiming that in the next few months or years, the world will have less demand for fuel. But this might just be a mere hypothesis. In the midst of this, a valid question comes: Is the world becoming gradually less dependent on oil from the Middle East? Can this really happen? If this is so, the prices will drop with less demand. Even so, many areas of the world economy are usually affected adversely when the prices drop in this manner.

But the world market is generally affected by so many factors other than the price of oil. Truly the world shares and stocks are not just affected by the uncertain oil market. Other significant areas of the economy are getting affected by the day. One of this is a celebrated giant in the name of the mining industry. Consider countries like Brazil, Russia and South Africa. In these countries, the prices of mining shares have been steadily dropping over the years. With this trend, you can guess that after a while, the overall prices of ordinary commodities will follow suit and drop significantly.

Have you heard of the cataclysmic term, Armageddon? Yes, to many people Armageddon means destruction, utter loss, disaster. Today, some major financial authorities are pulling in all directions in the attempt to catch up with the perpetually slipping prices of stocks. An Armageddon in the making?

Nevertheless, in the midst of all these, shouldn't we be optimistic? We expect that the world economy will rise up again, like the proverbial phoenix, at the end of the day. Nevertheless, the journey is filled with lots of challenges. While we all love to be optimistic, it might be wise to entertain what many call ‘a guarded optimism'. The signs are crystal clear: there could actually be another round of world recession looming on the wings.

At one time, in recent years, the world economy was estimated to grow at the rate of 3.1%. Nevertheless, several factors eventually worked against this initial positive trend. The highly delicate economies of nations like Brazil, Russia, coupled with the Chinese crisis as well as trouble at the US Federal Reserve Bank all combined to spell doom for the momentary glad tidings.

Where, then, will we get some real good news? Only the passage of time will tell.