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Mortgage brokers choose sides in UWM vs. Rocket Mortgage war

Breana Noble, The Detroit News on

Published in Home and Consumer News

"They see our company coming to take the top spot in the broker channel," Rocket's Emerson wrote. "Three of Rocket Pro TPO's top 10 days in company history have occurred in the week since UWM's ultimatum, with broker loan registrations increasing 40% this week. Even more telling, our company is on pace to onboard more than 600 brokers onto our platform in March — the single largest month of partner growth in our Rocket Pro TPO's history."

Ishbia says the decision is not about UWM's market share: "We already have enough business. UWM already is the largest wholesale lender over Rocket two or three times over. We have plenty of business. We are taking a stand for what is right."

Real estate lesson

UWM and brokers supporting the move have likened Rocket's actions to how online marketplaces like Zillow have made it easier for homebuyers to bypass the need for real-estate agents. The fear is that Rocket and its marketing powerhouse will attract brokers' clients whether indirectly or directly from the wholesale business to its direct-to-consumer retail business that offers Rocket larger margins. UWM doesn't have a direct-to-consumer division, so all its business must come from brokers.

"Brokers are signing their own death warrant" by sending loans to Rocket, said Randy Gammo, CEO of Troy-based National Mortgage Home Loans who says he terminated his partnership with Rocket last week to sign UWM's addendum. "The ultimatum was necessary. United Wholesale's growth in the mortgage industry will lead to the preservation of the mortgage broker model while Quicken's growth will lead to Quicken Loans only getting bigger."

Rocket Mortgage's ability to promote itself to consumers and service them directly make it difficult to retain customers who get Rocket loans through brokers, said Peter Galvez, broker-owner of United Wholesale Lending in California.

"Loan officers don't realize that in three years when that client wants to refinance or refer someone, they're not going to call you back," he said. "They're going to go straight to (Rocket) because of how easy it is."

Other brokers, however, say they have found Rocket to be a strong wholesale partner: "If the best pricing is with Quicken, why would we choose to not work with Quicken to provide our clients with the best price and execution possible?" said Wade Swindell, co-owner of Florida-based Atlantic Trust Mortgage Co. who says he ended his relationship with UWM after the ultimatum.


"I've never felt like Quicken doesn't value our business. I never felt like the business that is generated through their wholesale channel is unimportant to them."

Brokers across the board agree Ishbia has been a major advocate for brokers in recent years, with UWM increasing awareness, promoting, offering free training and investing in broker-focused technology that streamlines the loan process and helps the businesses stay in contact with their clients.

Rocket now is doubling down its efforts on the channel, buying a Super Bowl spot this year to promote brokers and launching a directory on its website to connect customers with local brokers. Rocket says it is investing $100 million into broker technology in 2021 and spending millions more to market the channel.

"Taking choices away and prohibiting competition is going to pull the broker channel down," said Kimber White, CEO of the National Association of Mortgage Brokers, calling UWM's decision unethical. "We're growing at a pace we've never grown before. What hurts us is what is going on right now and having to take sides."

But Katie Sweeney, CEO of the Association of Independent Mortgage Experts, says banks and lenders often refuse to work with certain brokers because they do not process enough loans or do not send them enough volume.

"I don't see that as UWM trying to dictate who a broker can and can't do business with," Sweeney said. "It's unrealistic brokers are working with all 75 lenders out there. I don't necessarily look at this as removing options."

A few brokers told The Detroit News they expect Ishbia will back off the deadline. Ishbia says that's not the case: "Zero percent chance. This is not an option or idea. This is a business philosophy. We're doing the right thing."

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