At HousingWire’s Spring Summit on Thursday, UWM CEO Mat Ishbia sat down for a one-on-one interview with HousingWire CEO Clayton Collins to discuss UWM’s strategy for this purchase market.
However, as Ishbia had just announced that UWM would no longer partner with mortgage brokers who also work with Rocket Mortgage or Fairway, the discussion became a broader conversation about the lenders’ overall strategy to grow broker share.
Talking about the broker announcement, Ishbia distinguished between other wholesale lenders that brokers might be working with and Rocket and Fairway, saying those two companies are actively undermining brokers.
“There are 75 wholesale lenders…brokers can use all 75 — but if they are using those two, I don’t want to partner with them. That’s our belief system. I have no problem if they want to work with [those two] but I’m not going to give you our proprietary technology, that’s not for people funding the competition of the broker channel,” Ishbia said.
UWM will require its broker partners to sign an addendum by March 15 that says they will not work with Rocket or Fairway. Ishbia said this would only affect about 25% of the 12,000 brokers who currently partner with UWM.
“Rocket goes to real estate agents directly and helps them to get licensed to be a loan officer and says ‘we’ll pay you a fee if you don’t send to brokers’… that’s not good for brokers. I don’t like that. Let’s win together as a family, as a team,” Ishbia said. “I support all brokers…all brokers are winning with this decision and that’s how I think about it.”
In the wide-ranging interview, Ishbia said UWM is well-positioned for the purchase market and to grow their market share. UWM is the top wholesale lender in the country and No. 2 overall, after Rocket.
“I don’t have on my board my goal is to be the No. 2 overall lender, it’s to be No. 1 and we’re going to do that.”
Ishbia said that UWM’s efficiency will serve brokers well this year since one of the company’s hallmarks is closing fast.
“UWM is closing loans in 16-17 days…In a purchase market you can’t miss the contract date. It’s so much more important to be fast on purchase than on refi. You’ve got to be fast and efficient and UWM wins on that with our technology.”
Ishbia also talked up the company’s new Prime Jumbo product, launching March 17, which will have an LTV up to 89.99%. Like many lenders, UWM pulled jumbo last spring during the uncertainty caused by the pandemic, but Ishbia said UWM’s new jumbo will be even better, with the ability to fund loans up to $2 million. Based on UWM’s volume, Ishbia estimated the jumbo business could be $1.5 billion a month.
“Our job is to give [brokers] the tools to compete. I bet on brokers all the time — as long as they can compete, they’re going to win.”
UWM announced it “sharpened pricing across the board” on Thursday, but Ishbia said the company won business based more on certainty and quick turn times than on pricing. He also said that the company’s investors (after its public debut in January) understood the value of UWM’s long experience in the mortgage industry.
“Our investors understand our history of growing in all markets. We’re a lot less cyclical than our biggest competitor,” Ishbia said. “We provide a better opportunity for those who want to invest in mortgage in the long term… We’ve been here for 35 years. I’ve been here 18 years and I’m going to be here a while.”
One of those long-term plays is holding onto mortgage servicing rights. Ishbia said UWM finished 2020 with about $185-190 billion in MSRs , and said he expects UWM will grow that to about $300 billion this year. He said rates on those are in the low 3s or high 2s and they will see “immense value” when rates go up.
When asked why UWM started retaining MSRs, Ishbia said, “It comes down to access to capital issues… when you get big enough you can take advantage of the fact it throws off cash too, that’s one of the biggest benefits of going public.”
Ishbia said UWM’s modus operandi won’t change under its new public structure.
“Investors have been clear: ‘keep doing what you’re doing.’ I always say, ‘What got us here will get us there.'”
The use of force to achieve equality will destroy freedom, and the force, introduced for good purposes, will end up in the hands of people who use it to promote their own interests.
“I don’t have on my board my goal is to be the No. 2 overall lender, it’s to be No. 1 and we’re going to do that.” -Mat Ishbia
A free society releases the energies and abilities of people to pursue their own objectives. It prevents some people from arbitrarily suppressing others.
So the question is, do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer to that is, no they do not.