It makes a move toward borrower diversification
United Wholesale Mortgage has announced it will accept personal or business bank statements instead of income documents or tax receipts to help self-employed borrowers qualify for a loan.
The alternative forms of income will be available for loans of up to $3 million, up to 90% LTV with no mortgage insurance required, company officials announced. In making the announcement, the company said this would give independent mortgage brokers another competitive edge as it relates to working with non-W2 borrowers.
Mortgage Professional America reached out to UWM’s chief operating officer, Melinda Wilner, to learn more about the company’s motivation in offering the alternative documentation option. She said the company’s move meets a demand currently in the marketplace.
“UWM is constantly offering products that our brokers are asking for,” Wilner said. “We are always looking for high-quality types of loans that our clients can offer to their borrowers and we thought bank statement loans were a good opportunity to meet all of our brokers’ needs, while still being at the highest level of quality that UWM always provides.”
The news comes on the heels of UWM’s announcement that it would extend no-cost appraisals for primary purchases until the end of April.
The company, in January, offered borrowers credits of up to $600 to offset appraisal costs through March. Given that the average appraisal is $540, the offer essentially allowed borrowers to avail themselves of free appraisals.
The nation’s largest wholesale and purchase lender initially set March 31 as the last date to take advantage of the program before extending it through the end of April. In a previous interview with MPA, UWM president and CEO Mat Ishbia (pictured) said the offering would yield a significant edge for independent mortgage brokers with both real estate agents and borrowers amid a purchase-focused environment with rising rates.
He called the $600 credit a win-win for borrowers and brokers, the latter helped in gaining relationships with real estate agents while increasing client referrals.
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“It’s jump-starting the purchase season, giving our brokers an advantage to go out there in the market to real estate agents and have something unique to sell,” Ishbia said at the time. “We’re going to cover appraisals up to $600 for them. The average appraisal is $540. In unique situations, it won’t cover the whole amount, but for the great majority it will cover it. This gives consumers a better deal and helps our brokers too. It’s a win-win.”
The latest announcement on borrower diversification also comes on the heels of a slide in profits for the nation’s top wholesale lender.
The Pontiac, Mich.-based firm reported $1.6 billion in profit compared to $3.4 billion in 2020. In the fourth quarter, net income took a deeper hit with profit of $239.8 million – down more than 80% from the comparable period in 2020 when $1.4 billion was posted.
Company officials attributed much of that decline to its temporary holding on to loans from the Federal Housing Finance Agency that it planned to sell in early 2022.
Despite the slide, the company said there are no plans to eliminate workers as other industry players have been forced to do. “No, we won’t be cutting people,” Ishbia said during the earnings call. “We’re not like everybody else. We don’t lay off like other companies, and we don’t have a need to,” he added, attributing the dynamic to a cost to originate and technology that is “…superior to our competition.”
Company officials conceded the employee base is down from the second and third quarters of 2021, but attributed that to “natural attrition” rather than layoffs. “We’re hovering between 8,000 to 9,000 team members,” a company spokesperson subsequently told MPA.