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How UWM captured the wholesale market

The journey to the top


“There will be no layoffs,” United Wholesale Mortgage CEO Mat Ishbia said on a call in early April with his team. “I will sleep on your couch before I lay anyone off. We’re going to do this together. If this month sucks, and next month sucks, I don’t care. No one is losing their job. No one on this call is losing their job.”

Ishbia spoke these words during the middle of some of the most volatile months that the housing industry has ever seen – months that threatened the jobs of more than 36 million Americans, and turned the lights out at some companies for good. 

Layoffs became commonplace and furloughs were expected. But not at UWM. Ishbia promised the economic crisis would not touch the company and its employees, saying, “They’re part of my family. You can’t cut family.”

“Could we have saved money? Yes,” Ishbia said. “Could we have made more money? Yes. Could we have made different changes? Yes – we could have done a lot of things. But that’s not who we are.”

Ishbia explained that as a CEO and owner, he can take a cut to his income or even take no income at all with more ease than members of his team working at an hourly wage.

The UWM team, even through the crisis, remained focused on its mission. And its secret to success rang out from every team member as they emphasized the company’s focus on culture and people, technology and its partnership with brokers.

The journey to the top

Before the pandemic hit, operations were running full speed ahead at the nation’s largest wholesale lender. In the second quarter of 2019, UWM became the No. 2 lender in purchase volume in the country. During the second quarter, the nonbank lender produced $8.3 billion in purchase loan volume, surpassing Bank of America’s $7.9 billion, JPMorgan Chase’s $7.86 billion and Quicken Loans’ $7.8 billion. Only Wells Fargo had a higher purchase volume at $15.4 billion. 

But purchase originations weren’t the only sector that grew. UWM also became the No. 2 overall lender, surpassing Wells Fargo, and held its spot as the largest wholesale lender. Numbers from Inside Mortgage Finance show the company more than doubled its 2018 production of $41.5 billion to a new company record of $107.7 billion in 2019. 

And the nonbank recently relocated, adding 900,000 square feet when it moved to its 150 acre, 1.5 million square feet campus in 2018.

UWM Chief Strategy Officer Alex Elezaj explained that when he joined the company, he talked to Ishbia about a plan to more than double the company. And that’s exactly what they did. 

Now, much of UWM’s growth comes as a result of focusing on its internal team members and its brokers. 

“This is definitely a company where we are solely focused on what’s best, not only for our team members first and foremost, but what’s best for our clients,” said Sarah DeCiantis, UWM chief marketing officer and 2019 HousingWire Vanguard. 

The company helps its broker community, especially during tough times, by offering free tools that would traditionally cost brokers thousands of dollars a month to help them grow. These tools include initiatives like social media campaigns and branding platforms. 

For example, UWM recently launched Brand360, which is a system that allows its clients to not only market themselves but also stay in touch with past clients. Brokers can also use this tool by branding it with their own marketing. 

DeCiantis said that this helped put brokers on a level playing field with retail, which often has teams of marketers for its branding.

“At the end of the day, if they [brokers] don’t win, if they don’t grow and they don’t succeed, we don’t stand a chance,” DeCiantis said.

Ishbia told HousingWire that even through the pandemic, UWM has three main buckets that it focuses on: its people and culture, technology and its partnership with brokers. The second bucket, its technology, has seen major growth over the past few years as Jason Bressler, the company’s first chief technology officer, grew the technology team to more than 800 members. 

All of UWM’s technology is done in-house, which has been a major factor of the growth at the company, Bressler explained. 

“If you build everything yourself, then you can be agile and make changes on a dime, so that’s what we do,” he said. 

Bressler said that keeping its technology in house also spurs UWM to continue improving on it and making it a better experience for its team internally and for brokers. 

“The more that you feel invested in what you’re helping bring to creation or helping to make better, the more invested you are in using it all the time and giving more feedback and making sure that it gets better and better and better – because you feel heard,” he said. “And you can see when those changes are being made; the only way to do that is if you actually created the system yourself and can make all those changes.”

Through initiatives such as beamortgagebroker.com, UWM worked to transition originators from retail to independent channels. After fielding multiple calls from retail LOs asking how to transition to the broker channel, UWM decided to create an informational website that had all the information, tools and resources in one place, explained Kristina Bennett, UWM senior vice president of sales.

“People didn’t realize how easy it is to become a mortgage broker and to join wholesale and the benefits to clients and consumers to be a mortgage broker versus in the retail channel,” Bennett said. 

Bennett first joined UWM when it was a 12-person company. Since then she has seen and been at the forefront of growth on every front – seeing UWM itself grow to 5,800 employees and take over about 33% market share within the wholesale channel. 

Through the website and other initiatives, Bennett led the way to about 1,000 LOs converting to brokers in 2019. 

Changing direction

Just as the company was experiencing some of its strongest growth, the surge in COVID-19 cases forced lenders to take a new direction. At UWM, that meant slowing down. 

“We’ve actually strategically slowed things down, not because of our inability to handle it, just more because of the macro economic environment that we’re in,” Elezaj said.

In late March, UWM tightened its underwriting standards on verifying income and employment, requiring re-verification of employment status on the day of closing.

“We’re doing them again right before closing to make sure that people still have jobs, because people are losing jobs at such an alarming rate right now,” Ishbia said at the time. “And so we put an extra process in place, which most people actually appreciate and recognize, but some people probably don’t love it.”

UWM was one of the first to tighten their underwriting standards, but they were far from the last. Many other lenders including Caliber Home Loans, Parkside Lending, U.S. Bank, First Community Mortgage and many others tightened their underwriting standards in the wake of the economic crisis brought on by COVID-19.

“We were the first one to the marketplace to do same-day verification of employment and that was a difficult decision to make, but these were things that we wanted to do to make sure that we were protecting the integrity of our business and lending people money who have jobs,” Elezaj said.

UWM moved an extra 400 people to the task of verbally verifying employment on the day of closing to ensure that the closing process continued as smoothly as possible.

“We don’t want to put anybody in a home or a mortgage that they can’t afford, even if it’s during a temporary time, so that’s why we jumped in so quickly,” UWM Chief Operating Officer Melinda Wilner said.

There are many unknowns right now about the virus and just how long it will take the economy to get back to normal. But once everything does pass, Wilner said UWM’s clients can expect all operations to look exactly like they did before the start of COVID-19. 

As executive vice president of sales, Allen Beydoun normally travels across each state, stopping at broker shops across the U.S. to create connections. Beydoun estimates he has visited from 3,000 to 4,000 shops as he sought to learn more about the broker community and what they were facing.

“We want to hear about how they’re growing their business and how we can help them grow their business at the same time,” he said. 

When travel restrictions set in, all of that changed. 

But Beydoun said that what helped everyone through this time was the relationships they had already developed over his past 13 years with the company. 

“It’s easy for me to call them because I’ve been to their offices,” Beydoun said. “I’ve had lunches with them; I’ve had dinners with them; I’ve talked to them about how to help them grow their business. So it’s a pretty good relationship.”

Beydoun now uses Zoom, emails and phone calls to take the place of the face-to-face meetings he is accustomed to. 

The way loans are being originated wasn’t the only thing to change when COVID-19 hit. Where the work was being done also changed. 

UWM has long held the stance that it has no formal work-from-home policy. Ishbia was clear that he wanted his nearly 6,000 employees working at the office. 

In fact, Bressler, who lives in Chicago, flies into Michigan each week and stays at a local hotel as he works out of the office before flying back home to his family on the weekends. 

There were no exceptions. 

Until there were. 

When COVID-19 hit, everything changed. And it happened overnight. 

“On a Friday, we decided that everybody was going to have to work from home and we would have to start that Monday,” Bressler recounted. “And so we did. We had 6,000 team members at UWM, and we got all of them working literally over the weekend – set up in their houses, all their phones were sent off and we started reaching back out to the broker community immediately.” 

The company that would never work from home had just gone remote. 

Bressler explained that this transition was vital not only for the UWM team, but also for brokers who needed to understand that their loans were still going to close. 

“Within a weekend we went from a company that never allowed anybody to work from home, to all 6,000 people have to work from home to make sure that you’re safe, and your families are safe,” he said. “And so our role in doing that was huge to the broker community to be able to make sure that they understood that they still have stability.” 

“Now if I walk out of my office, I can’t see anyone for 100 feet,” Ishbia said, describing the earie quietness that has set in at UWM headquarters.

A focus on future

Before the quarantine started, eight UWM employees sat down at one table to eat their lunch before continuing on with their day. One man walked over confidently, grabbed a chair, and sat down among them. 

Several of the employees exchanged a confused look. Who was this guy? 

The table was a group of employees on their first day. And the man who so presumptuously sat down with them was Mat Ishbia. 

This was Ishbia’s normal routine before quarantine started. Each day he would walk down to the cafeteria for lunch and sit at a new, random table. He would get to know employees, talk and foster those relationships that you can’t get from sitting in the c-suite. 

And it’s a routine Ishbia has plans to return to. He explained that despite some companies changing their stance and moving to a permanent work-from-home option, he has no such plans. 

“If it takes another month or three months or six months, who knows, but it will get back to normal,” Ishbia said.

He explained that the stay-at-home orders made him realize that UWM is capable of moving its nearly 6,000 employees remote on a whim – and that he will never voluntarily do it again. 

“That’s just not who we are here, and that’s not what we’re going to ever do,” Ishbia said. “And so unless this pandemic lasts for the next five years, we’re going to get back to normal as soon as everyone’s safe and healthy and we’re able to do that.”

“I wouldn’t want to be the CEO if we couldn’t have our team and our culture, and our family feel here.”

The UWM team is optimistic that human interaction will prevail throughout the industry as well, saying even major events and trade shows will pick back up where they left off. 

“I think everything will go back to where it was, obviously with people being just a little bit more cautious,” Beydoun said. “Human interaction is key, and in any business that you’re in, trade shows will come back. Brokers are already back in their communities.”

Beydoun explained that even in Michigan, one of the strictest states when it came to stay-at-home orders, brokers and agents were already back to work as early as May. 

Moving forward, Ishbia explained his goal is still to pass up Wells Fargo in overall volume for 2020, and he plans to hit that goal. 

“Our job is to focus on safety, doing right loans, having the lowest delinquency rates, taking care of our brokers, taking care of our team members, and we’re No. 1 at all of those things,” he said. “The volume side: will Wells Fargo beat us as the No. 2 lender in 2020? Absolutely not.”

While it’s possible that Wells Fargo could surpass UWM in monthly volume during some months, or have better weeks, Ishbia said he has no intentions of falling behind in annual origination volume. 

UWM is still on track to grow its team by about 2,500 employees in 2020, according to its executive team.

“We want to be No. 1,” Elezaj said. “And that’s No. 1 in overall lending, so right now we’re No. 2. And we’re fine with being No. 2 as long as we know that broker channels are growing and things are good; we’re not going to make silly choices, but our goal is to be No. 1, and we will become No. 1, it’s just a matter of when, not if.”

A clear mission

It would be out of place to say that UWM has been facing unprecedented times. Not because they haven’t, but because it’s more appropriate to say the entire world has. There is not a single continent that COVID-19 hasn’t affected, and countries across the globe are doing what they think is best for their citizens.

From closing down borders to stay-at-home orders to increased testing and the race to find a vaccine – everyone is doing what they can to stop the spread. 

For Ishbia, his part in this crisis was clear. He announced that not one employee would be laid off and that he would sleep on their couch before he let that happen. Luckily for him (or for his employees?) that wasn’t necessary.

“The vision is tied to my extreme and maybe maniacal mindset on the best place for a consumer to get a loan is through a mortgage broker, and the best place for a loan officer to originate loans is as a mortgage broker,” Ishbia said. “And because I believe those are both facts and not opinion, we went all-in on making the wholesale channel and the broker channel bigger, stronger, better.” 

To read the full July issue of HousingWire Magazine, click here.

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