United Wholesale Mortage CEO Mat Ishbia launches a rocket attack. Will brokers rally around him?
Roling, who previously worked for Rocket, an affiliate of Rocket Mortgage, questioned whether what Ishbia is alleging put Rocket and Fairway in violation of the Federal Real Estate Settlement Procedures Act, or RESPA.
“It could pass the letter of the law with RESPA … but it still smells bad,” Roling said. “If what (Ishbia) said is true … it looks like they are paying people to point customers in a certain direction, which may not be a bounce in itself, but it is not that far away. “
As such, Roling wondered why Ishbia wouldn’t just rally his thousands of brokers to file a class action lawsuit.
Ishbia, for his part, told Crain’s in an interview that he is not alleging any illegal wrongdoing, but is simply trying to shed light on the alleged wrongdoing of Rocket and Fairway and alleged attempts to upend the channel. brokerage where UWM operates as the primary lender. He noted that he “assumes” that companies’ actions comply with RESPA, adding that he is not meant to be a judge or jury.
But the goal of his decree to brokers is to make sure they don’t fund companies he says are trying to undermine their business model.
“We are going to protect the channel and that is what we have decided to do,” Ishbia said. “Rocket and Fairway would like the channel to go away because they can charge higher margins in the retail channel and we are protecting that because it’s not better for consumers and it’s not better for our broker clients. in mortgage loans. “
When asked why he believes he has the power to ensure that brokers choose to work with his business over others, Ishbia said he apparently has no advantage.
“I don’t think I have any weight,” he told Crain. “I think I just said that is what I believe and that I will support the broker channel. It is freedom of choice.”
UWM works with about 12,000 independent mortgage brokers across the country, according to figures sent to Crain’s. Approximately 3,300 of these brokers also have business relationships with Rocket Mortgage and / or Fairway.
On Thursday evening, UWM said it had received 600 responses from brokers who work with the three companies, and 93% said they would sign UWM’s addendum demanding they drop their dealings with Rocket and Fairway.
“There are 75 major lenders in (the) wholesale (channel), and you can either be with us and 73 others or be with them and 74 others,” Ishbia said. “No problem, whatever you want to do.”