United Wholesale Mortgage Secures $1.5 Billion Oaktree Capital Infusion

United Wholesale Mortgage is securing a $1.5 billion capital infusion from Oaktree Capital Management to stabilize its finances after reporting a $603 million loss. The loss stemmed from interest rate hedges the company purchased for a planned $1.3 billion acquisition of Two Harbors, a deal that collapsed in March when Two Harbors accepted a competing cash offer.

In response to the failed merger, the mortgage lender has filed a federal lawsuit against Two Harbors for fraud and breach of contract, seeking more than $500 million in damages. The company's valuation has declined significantly, dropping from roughly $16 billion at its 2021 public debut to approximately $2 billion.

To finalize the Oaktree financing, the company is suspending common-stock dividends. Oaktree Capital Management will receive two board seats, veto rights over C-suite changes and corporate bylaws, and a guaranteed return of at least $600 million. CEO Mat Ishbia, who maintains 79% of the company's voting power, described the arrangement as a strategic partnership.