The way in which the mortgage lending industry treats refinance borrowers turned into a finger-pointing session this week.
On Sunday night, HousingWire reported that C2 Financial would discontinue offering Quicken Loans' products to clients, alleging that the latter would keep the customers refinancings to themselves, instead of returning the business back to the former.
This battle for borrowers is intensifying in the face of a shrinking mortgage lending economy. Also in play is the recent formation of the mortgage-broker centered trade group, called the Association of Independent Mortgage Experts (AIME, aka BRAWL) and its members, who include some of the largest mortgage brokers firms in the nation, namely United Shore, aka United Wholesale Mortgage.
In a recent exchange of emails with HousingWire, Quicken defended its business practices, saying more than 25 C2 LOs were left upset and confused by the latest development, while also accusing AIME members of trying to undermine its operations.
Here is one such exchange from Jay Farner, CEO of Quicken Loans:
"In the past year, since the inception of BRAWL, Quicken Loans Mortgage Services (QLMS) has doubled its market share by sticking to what we’re best at: providing competitive pricing, industry-leading client service and always meeting the needs of our broker partners.
We have also received calls of support from partners who recognize that, despite its stated goals, ‘BRAWL’ is nothing more than a front for a middleman wholesaler who is threatened by the current dynamics in the marketplace. It’s clear this initiative is a self-serving, smear campaign driven by United Shore Mortgage and its CEO Mat Ishbia, targeted at its largest competitors. Ishbia is obviously becoming increasingly threatened by the tightening margins of the current market and several larger, better capitalized competitors who handle every aspect of the mortgage, from origination through servicing.
At the end of the day, mortgage brokers and their customers benefit from lender competition. It’s a shame when a middleman who suddenly is feeling the heat of a competitive marketplace resorts to propping up so-called ‘industry trade groups’ based on a false narrative and made-up circumstances that do not exist to scare some brokers away from doing business with his competitors based on his libelous propaganda."
The strong words were since match by UWM after being contacted by HousingWire. While the specific nature of the charges were not revealed, United said they were dismayed by the charges set forth by Quicken and sent the following statement:
"As the wholesale channel continues to thrive, even in this down mortgage market, brokers now have a stronger voice and leverage to only work with lenders who are looking for a true partnership. With that resurgence, mortgage brokers are fighting back against lenders who are just in the wholesale channel to build their retail business long term.
This has become a hot topic in the industry over the last 12 months, as the business practices of Quicken Loans and other large retail lenders trying to compete in the wholesale channel have been exposed nationally.
UWM has no issues with Quicken Loans specifically, but does have an issue with any lender that solicits mortgage broker customers and does not treat those brokers as real business partners, and Quicken Loans seems to fit that bill from all the data that is publicly available. UWM is the fastest growing overall mortgage lender in the country, the #1 wholesale lender in America for 3 consecutive years, and will continue to be the biggest advocate for all mortgage brokers across the country."
When Quicken was asked if they plan a further counter attack, Farner chose to point to the importance of quality leadership in mortgage lending, saying it is not a title or a rank that can be granted.
“It’s something that can only be demonstrated through consistent moral, ethical and honest action – in how an organization conducts itself, its willingness to be humble and the vision it sets for others,” he said.
“Our focus remains on meeting the needs of our broker partners, as well as the millions of hard working Americans yearning to achieve the dream of homeownership. Those are the people we care about. Those are the things that matter. Everything else is noise. When slick operators come along, however, you can be sure we will expose their shady schemes to the marketplace,” Farner concluded.