Key facts
- Fitch Ratings downgraded United Wholesale Mortgage (UWM) to B+ from BB-.
- The downgrade was due to a significant increase in leverage.
- UWM reported a second-quarter net loss of $451.9 million.
- Borrowings increased, contributing to higher leverage.
- Corporate leverage increased to 6.1x from 3.2x.
Fitch Ratings has downgraded United Wholesale Mortgage (UWM) to a B+ rating, a decrease from its previous BB- rating. The downgrade is attributed to a significant increase in UWM's corporate leverage, which rose to 6.1x. This marks a substantial jump from the previous leverage ratio of 3.2x. The increased leverage follows a considerable net loss experienced by the company in the second quarter, amounting to $451.9 million. Higher borrowings also contributed to the elevated leverage. Fitch's assessment indicates a shift in the company's financial risk profile due to these factors.