Suns Owner's Borrowing Under Scrutiny After UWM Shares Plunge

Mat Ishbia posted a four-minute LinkedIn video from a UWM client and sales meeting this week with a simple message: the mortgage company has never been in better shape.

"From an AI, technology, operations, sales, broker channel - never been stronger," he said in the video. "And now stronger from a capital and liquidity perspective."

The timing felt odd to anyone watching the stock.

The Dividend That Disappeared

For years, UWM paid out huge chunks of its profits to shareholders. From 2020 to 2025, the family holding vehicle known as SFS Corp. received nearly $6.3 billion in distributions, mostly from dividends.

That cash helped him buy a controlling stake in the Phoenix Suns. It also made him a billionaire many times over.

But the music stopped this month. UWM suspended its dividend and instead handed Oaktree $1.5 billion in new preferred shares, which pay a 10% coupon. Ishbia bought $150 million of those shares himself. The money that used to go to regular dividends will now largely go to paying that preferred return.

The deal came after a costly mistake. UWM lost about $600 million on an interest-rate hedge tied to its failed attempt to buy mortgage servicer Two Harbors Investment Corp.

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The company also funneled over 96% of its net income into those shareholder distributions over the past several years. That means UWM's total equity declined even while it stayed profitable. It was effectively borrowing from its own balance sheet to keep the payouts flowing.

Those payouts were possible because UWM was profitable for years, but they left the company with less capital to absorb the recent hedge loss and the cost of the new preferred deal. That is the context behind the dividend suspension and the Oaktree financing.

The Personal Leverage

Most of Ishbia's wealth sits in UWM stock, and he has borrowed heavily against it.

He used most of his family's UWM equity as collateral for JPMorgan loans originally worth up to $1.8 billion. His brother Justin put up stakes in his private equity firm as collateral for separate JPMorgan loan facilities that reached about $2.3 billion after a fifth loan was added in 2025.

An Aug. 5 UCC filing shows Ishbia also pledged his UWM tax receivable agreement payments as collateral. UWM reported a tax receivable agreement liability of $280 million as of June 30.

A UWM spokesperson called the borrowing concerns "nonsense," saying the outstanding balance on those credit facilities is so low it could be paid off anytime and is "immaterial."

What the Ratings Agencies Say

Fitch Ratings downgraded UWM and said it will treat the preferred shares as debt. The agency cited elevated key-person risk because of Ishbia's "significant control" over the company. Moody's then changed UWM's outlook to negative from stable.

The bottom line: This is a story about what happens when a founder's fortune is tied up in one stock, and that stock falls more than 80% over two years. Ishbia says he is not worried. "Everyone wants us to fail," he said. "And the best part is, they're not going to get what they want."

What It Means for Investors

For investors, the lesson is less about Ishbia and more about structure. The new preferred shares carry a 10% coupon, which is a heavy cost for a company that just lost a major bet on a hedge.

UWM and Oaktree are backstopping a $400 million common-stock offering expected later this year. That should bring in fresh cash, but it also dilutes existing shareholders.

Your portfolio does not need to worry about Ishbia's personal balance sheet. But UWM's stock is now a bet on whether the company can grow its way out of this, and whether the dividend ever comes back. The shares that once made Ishbia a $13 billion man now say the market is not convinced.

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