When United Wholesale Mortgage (UWM) president and CEO Mat Ishbia announced last week that brokers who work with Rocket or Fairway could no longer work with UWM, Jason Sharon (pictured) wrote him a ‘thank you’ card.
The broker/owner of Home Loans Inc. in Charleston SC. told MPA that he was surprised but delighted to hear Ishbia going after his competitors in that way.
“It forces the broker community to understand what Fairway and [Rocket] are doing to us,” Sharon said. “They say that they’re our friends and they’re our advocates, but their practices are completely the opposite.”
In his announcement last week, Ishbia alleged that Fairway was recruiting loan officers from brokerages to work in their retail outlets and that Rocket Mortgage was cutting brokers out of the market by certifying real estate agents and other stakeholders as loan officers. While Sharon said he doesn’t have much experience with Fairway, he was highly critical of Rocket for marketing against him. He claimed that Rocket has bought the search keywords “Charleston Mortgage Broker” out from under him, cutting into his business. He said he doesn’t mind these lenders soliciting his past clients, but considers advertising competition as where he “draws the line.”
Yury Shraybman, broker/owner at Innovative Mortgage Brokers in Philadelphia, PA., hasn’t had the same reaction as Jason Sharon just yet. As of now he hasn’t decided whether he’ll sign UWM’s addendum and cease business with Rocket and Fairway, or if he’ll do the opposite. In the immediate term, however, he stressed that borrowers are already benefitting from the competition.
The new jumbo prime product launch and rate sheet that followed Ishbia’s Facebook Live announcement, Shraybman said, were both very competitively priced. He’s also seen a response from Rocket, who emailed the announcement that they’ve lowered the qualifying FICO scores for self-employed borrowers from 780 down to 700. The banner above the announcement reads “A true partner doesn’t tell you how to run your business. Period.” Shraybman described that as a thinly veiled response to UWM.
“I think that there’s definitely two sides to this whole thing,” Shraybman said. “Some brokers might think that it’s taking the choice away from them, but at the same time, over the last couple of days, it seems like the borrower has been significantly benefiting from this.”
Shraybman also doesn’t see the limitation of broker choice as particularly dramatic. He noted that many other lenders place conditions on their brokers, citing an example from early in his career when his net worth was deemed too low to qualify for one lender. UWM’s ultimatum, in his view, is just another requirement one lender puts on its brokers, which is hardly new in the industry.
Sharon agreed with Shraybman’s assessment of choice limits and argued that this move will be good for the broker channel as a whole. He believes that UWM is doing for brokers “what the National Association of Realtors should have said about Zillow two years ago.”
Shraybman admitted that he has some concerns about this deal, however. Primarily, he’s worried that other lenders might get added to UWM’s list. As of now he’s relatively comfortable making a choice because Rocket, UWM, and Fairway all have relatively similar products. If he had to pick between a non-QM lender and a conventional lender, however, it might prove more difficult. He emphasized that his advantage as a broker is in the diversity of products he can access and any limits on the kinds of specialist lenders he can work with would be a serious no-go.
By Monday afternoon, Mat Ishbia had released a video statement declaring that no other lender would be added to the list.
As Shraybman looks to make his decision, one he said effectively comes down to Rocket or UWM, he’s looking both at rates and at quality of service.
“When I look for a lender, I never look at the lowest price lender because, with a lot of them, their service sucks,” Shraybman said. “I like working with lenders that have good rates and good service. Brokers who are stuck on this decision [between UWM and Rocket] I would say they have to look at who most of their business is with first, and who offers the best combination of rates and service for you… You’ve got to see what’s in your benefit, what’s best for you and what’s best for the borrower’s bottom line.”