Shares in UWM Holdings, parent of United Wholesale Mortgage, plunged 40% Thursday after the biggest U.S. mortgage lender suspended its dividend and raised fresh capital.

UWM announced a $2.05 billion equity investment from Oaktree Capital Management and SFS Group Capital LLC, a newly formed investment vehicle owned by family of CEO Mat Ishbia. The family is also the majority owner of the NBA’s Phoenix Suns.

Pontiac, Michigan-based UWM also said it suspended its quarterly dividend to preserve capital.

“We’re taking decisive action to make UWM stronger, more liquid and better positioned to win for years to come,” Ishbia said in a statement.

UWM shares have now collapsed about 85% from their 52-week high, set in September 2025.

The capital raise comes as UWM’s financial position weakened during the latest quarter. Total equity fell to about $1 billion as of June 30 from $1.6 billion at the end of March, while available liquidity stood at approximately $1.3 billion, including $498 million in cash and borrowing capacity.

The moves come as mortgage lenders continue to grapple with one of the toughest operating environments in years. Investors have recently pushed up Treasury yields amid renewed expectations that benchmark Federal Reserve lending rates could stay where they are or even move up in the face of stubborn inflation. Elevated mortgage rates that are tied to the Treasury market have in turn kept homebuyers on the sidelines and limited refinancing activity, further dimming the outlook for the housing market.

UWM lost $451.9 million on revenue of $888 million in the second quarter, reversing net income of $170.4 million in the first quarter and a profit of $314.5 million a year earlier.

Mortgage originations totaled $39.7 billion in the second quarter, down from $44.9 billion in the prior quarter but unchanged from a year earlier.