If you thought that the simmering feud between United Wholesale Mortgage (UWM) and rivals Quicken Loans and Fairway Independent Mortgage Company would lose steam any time soon, well, buckle up.
UWM announced on March 4 that it would no longer do business with mortgage brokers who also worked with Quicken and Fairway, framing the two companies as organizations “that are hurting the wholesale channel.”
Specifically, UWM CEO Mat Ishbia called out Fairway for “soliciting loan officers and talking negatively about brokers” and chastised Rocket for “going after real estate agents” and “trying to cut the loan officers out.”
Ishbia, who has vehemently and vocally defended the new policy, took to CNBC’s “Mad Money” last week to report that the brokers who work with UWM have responded positively to the change, saying that “not even 500” out of 12,000 brokers chose to keep working with Quicken.
“The reality is, brokers are all in,” Ishbia said. “They understand that Mat and UWM [are] here to protect the broker channel and consumers, because consumers get lower rates when they go through a broker.
“That’s not an opinion,” professed Ishbia. “That’s a fact.”
Ishbia’s CNBC appearance is the latest salvo in the battle of Michigan lending giants (both Rocket and UWM are based in the Detroit area). Rocket Mortgage Rocket Mortgage initially responded via a public statement from Executive Vice President Austin Niemiec, who tweeted that “[UWM’s] move decimates the idea of the free and open market that is so critical to the broker community. We continue to advocate for the right of brokers and consumers to choose how they secure home financing.”
Rocket, the country’s largest mortgage lender, doubled down on its rebuttals over the weekend of March 6. In an email to brokers, Niemiec went as far as publicly divulging Rocket Pro TPO’s lending volume — a first for the company — of $97 million in 2020. He called UWM’s move “an act of fear” due to Rocket’s rising market share.
As for the numbers being thrown around, figures are coming from both sides of the wholesale lender battle, leaving any statistical winner unclear. Rocket at one point announced that “22 of our 25 largest partners have rejected UWM’s ultimatum and have elected to continue working with our company,” and a spokesman for the company has said that over 9,000 brokers have rejected UWM in favor of continuing to work with Rocket. And according to a March 18 Wall Street Journal story, Rocket’s market share has grown even further “since UWM announced it will no longer compete with [Rocket].”
Fairway, for its part, has been less aggressive in response, with CEO Steve Jacobson saying that the company has “always believed in doing what is best for the consumer, and that will never change. For that reason, we will always support a broker’s decision to work with any lender they choose, and we will continue to work every day to earn the trust and respect of all our origination partners. At the end of the day, we are all working for the borrower.”
A few other groups also criticized UWM’s policy as harmful to the free market. Via a statement from President Bob Broeksmit, the Mortgage Bankers Association said it “does not condone activities designed to thwart competition in the mortgage market and limit loan options available to borrowers.” Kimber White, president of the National Association of Mortgage Brokers, concurred, calling the move “counter to the spirit of freedom and independence that is the very foundation of our broker businesses. You should be allowed to work with whomever you want, and who offers the best product and customer service, not a company who dictates your business model to you.”
Ishbia, however, insists that the move was not about slashing competition.
“I know how people want to portray it, but the decision was not about doing things exclusively,” he told CNBC’s Jim Cramer. “We basically said, ‘Mortgage brokers —20,000 of you guys — if you’re partnering with Rocket, they’re out there doing things, maybe you’d call it ‘underhanded’ or maybe in a gray area, to affect consumers and brokers. What we’re saying is, ‘I can’t stop them, but if you’re going to work with them, don’t work with us.’”
Others appeared to back UWM’s policy and claims by censuring Rocket Mortgage’s actions. Katie Sweeney, CEO of the Association of Independent Mortgage Experts (AIME), claimed penned a letter declaring that “brokers deserve better than to be used for lead generation — which is precisely why we’ve never partnered with Rocket TPO or any other lender with similar business practices.” [Note: United Wholesale Mortgage is a title sponsor of AIME.]
Ishbia remains firm in his belief that UWM’s move is the right one.
“We’ve been the No. 1 wholesale lender for six straight years,” he told Scotsman Guide. “We’ve got more market share than Nos. 2 through 9 combined, right? We’ve got a little bit of control of things, so if you [as a broker] want to [work with Rocket and Fairway] and help the people who are hurting all of us, that’s okay. But I’m not going to help you with our technology, our service and our pricing.”