United Wholesale Mortgage, the No. 1 wholesale mortgage originator in the U.S., is becoming a publicly traded company. It announced that it will merge with a special purpose acquisition company (SPAC), Gores Holdings IV (NASDAQ:GHIV), which is listed on the Nasdaq.

SPACs are all the rage at the moment. This is because they allow companies to go public without undergoing a traditional initial public offering (IPO), which can take months to arrange and cost millions of dollars in fees to underwriting banks. SPACs are created expressly as vehicles for an existing business to park itself into. 

House key atop mortgage document.

Image source: Getty Images.

Gores Holdings IV's IPO was in January. Under the terms of the merger arrangement, United Wholesale will hold 94% of the combined company, which is to be renamed UWM Corp and trade under the ticker symbol UWMC. United Wholesale is also to assume roughly $425 million in cash held by Gores -- the amount raised in the latter's IPO. All told, this will value UWM Corp at $16.1 billion, an all-time high for a SPAC deal.

Wholesale mortgage lenders are entities that sell housing loans only through third parties, like banks or brokers. According to The Wall Street Journal, United Wholesale is on pace to underwrite almost $200 billion worth of housing loans this year, thanks to strong recent demand for homes. This amount would be almost double its figure for 2019.

The United Wholesale/Gores Holdings IV merger is planned to take place in the fourth quarter. 

The announcement comes not long after another big fish in the mortgage lender pond, Rocket Companies (NYSE:RKT), came to the stock market following its IPO in August (Rocket Companies owns both Rocket Mortgage and Quicken Loans). It has been a volatile stock, however, falling at double-digit rates after reporting its second quarter results earlier this month.