Two of the nation's prominent mortgage lenders, United Wholesale Mortgage (UWM) and CrossCountry Mortgage (CCM), have initiated significant strategic actions that could reshape parts of the lending landscape. UWM has moved to adopt a higher conforming loan limit ahead of official federal announcements, while CrossCountry is expanding its investment arm with over $1 billion in new equity.
These developments signal a proactive approach by major industry players to capture market share and adapt to evolving economic conditions. UWM's decision provides early access to more flexible financing for homebuyers in high-cost areas, and CrossCountry's capital infusion positions it to acquire a substantial portfolio of new loan assets.
Key Takeaways
- UWM's Early Move: United Wholesale Mortgage is now honoring a conforming loan limit of $819,000, well before the official 2025 limits are announced by federal regulators.
- CrossCountry's Expansion: CrossCountry Mortgage's asset management division has secured over $1 billion in equity, enabling it to invest in more than $20 billion worth of new loans.
- Investor Backing: The expansion of CrossCountry Capital is supported by a significant commitment from Ares Alternative Credit, a major global investment manager.
- Market Impact: These actions reflect a competitive strategy among lenders to gain an advantage by anticipating market changes and expanding their investment capabilities.
UWM Preempts Federal Guidance on Loan Limits
United Wholesale Mortgage has taken an unconventional step by raising its conforming loan limits months before the Federal Housing Finance Agency (FHFA) is expected to release its official figures for 2025. The lender announced it will now underwrite loans up to $819,000 under conforming guidelines.
This decision allows borrowers to secure larger home loans without needing to apply for jumbo mortgages, which often come with stricter qualification requirements and potentially higher interest rates. The move is particularly beneficial for buyers in expensive real estate markets where property values exceed the current national limits.
Understanding Conforming Loan Limits
Conforming loan limits are the maximum loan amounts that government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac can purchase or guarantee. These limits are set annually by the FHFA and are based on changes in average U.S. home prices. Loans above this limit are classified as jumbo loans and are not eligible for purchase by the GSEs, making them a different category of risk for lenders.
Typically, the FHFA announces the new limits in late November, timed around the Thanksgiving holiday. By acting now, UWM provides its network of independent mortgage brokers with a significant competitive edge, enabling them to offer higher loan amounts to clients immediately.
The Strategy Behind the Early Increase
UWM's proactive strategy is designed to capture a larger share of the high-value mortgage market. By honoring the anticipated new limit early, the company can attract brokers and borrowers who might otherwise have to wait or seek jumbo financing from other lenders.
This move is calculated based on housing price data that suggests a substantial increase in the conforming limit is likely for the upcoming year. While there is a risk that the official FHFA limit could be different, UWM is betting that its projection is accurate and that the market advantage gained in the interim will be substantial.
A Calculated Risk
By raising the limit to $819,000, UWM is essentially fronting the risk that the FHFA's final number will match or exceed this figure. If the official limit comes in lower, UWM would hold these larger loans on its own books without the ability to sell them to Fannie Mae or Freddie Mac, treating them like jumbo loans.
The decision underscores the intense competition within the wholesale mortgage sector, where lenders vie for the business of thousands of independent mortgage brokers across the country. Offering more flexible products and higher loan limits is a key differentiator in this environment.
CrossCountry Mortgage Secures Over $1 Billion for Expansion
In a separate but equally significant development, CrossCountry Mortgage (CCM) is substantially scaling up its asset management division, CrossCountry Capital (CCC). The company announced it has secured more than $1 billion in equity commitments to fuel this expansion.
This capital infusion, which comes with major backing from an affiliate of Ares Management Corporation's Alternative Credit strategy, will support an estimated $20 billion in new loan investments. This positions CCC to become a major player in the acquisition and management of residential mortgage assets.
The move allows CrossCountry to diversify its business model beyond loan origination. By building a large portfolio of managed loans, the company can generate long-term revenue streams and gain more control over different segments of the mortgage market.
"This expansion represents a pivotal moment for our company. The substantial equity commitment allows us to scale our operations and strategically invest in a vast portfolio of loans, creating new opportunities for growth and stability."
The Role of CrossCountry Capital
CrossCountry Capital, the asset management arm of CCM, focuses on acquiring and managing pools of mortgage loans. With this new funding, CCC will have the capacity to purchase loans originated by CrossCountry Mortgage as well as from other lenders in the market.
This strategy offers several benefits:
- Diversified Revenue: It creates income from managing assets, which is separate from the upfront fees generated by originating new loans.
- Market Influence: Holding a large portfolio of loans gives the company more influence and insight into market performance and trends.
- Risk Management: It allows the company to manage different types of loan assets, balancing its overall risk profile.
The backing from Ares Alternative Credit is a strong vote of confidence in CrossCountry's strategy. Ares is a leading global alternative investment manager, and its involvement provides not only capital but also significant institutional credibility.
What is an Asset Management Arm?
In the mortgage industry, an asset management division is responsible for acquiring, managing, and servicing portfolios of loans. Instead of just originating a loan and selling it, the company holds onto the loan as an investment. This division manages the performance of these assets, aiming to generate returns for the company and its investors over the life of the loans.
Implications for the Broader Mortgage Market
The strategic initiatives from both UWM and CrossCountry highlight a trend of consolidation and aggressive growth among the largest non-bank mortgage lenders. As the market navigates fluctuating interest rates and housing inventory challenges, companies are seeking innovative ways to secure their market position.
UWM's pre-emptive loan limit increase is a direct play for origination volume, targeting high-cost markets. Meanwhile, CrossCountry's capital raise is a longer-term strategic investment in building a durable, income-generating asset base. Both actions demonstrate a forward-looking approach aimed at thriving in a complex and competitive financial landscape.
For consumers, UWM's move could mean earlier access to better financing options. For the industry, CrossCountry's expansion signals a growing trend of lenders becoming major asset holders, potentially altering the dynamics of the secondary mortgage market.
