In concert with its ultimatum to brokers that they not use Rocket Pro TPO and Fairway Independent Mortgage, United Wholesale Mortgage on Wednesday officially released a new jumbo product.
The Pontiac, Michigan-based wholesale lender, which discontinued jumbo products at the onset of the pandemic, is offering its mortgage broker partners a jumbo product that goes up to $2 million, with a loan-to-value ratio of up to 89.99%.
“Prime Jumbo,” as it is dubbed, offers competitive rates, simplified guidelines and the ability to run DU for eligible loans, the lender said in a statement Wednesday. It is available for purchase, rate/term refinances, and cash-out for primary, secondary and investment properties.
“We’re excited about the launch of Prime Jumbo and the competitive edge it’s giving brokers around the country,” said Mat Ishbia, president and CEO of UWM. “Traditionally, banks offer the more highly desired jumbo products but this product levels the playing field for brokers to get their jumbo borrowers into their dream homes or refinance into a lower rate.”
UWM’s arch-rival Rocket Mortgage released its own jumbo product for brokers in its Rocket Pro TPO network in late February. Similar to UWM’s offering, Rocket allows its brokers to send them loans up to $2 million for primary, secondary and investment properties. However, Rocket’s offering only goes up to 80% LTV and doesn’t allow a cash-out as high as UWM.
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UWM previously offered two jumbo products, “High Balance Nationwide” and “Jumbo Bank Buster,” but removed both from rate sheets as the COVID-19 pandemic set in around March last year. UWM claims the newest product combines the best features of High Balance and Jumbo Bank Buster along with competitive pricing and better-than-average turn times.
Brokers have been vocal in recent months that many would-be clients have been shut out of non-QM loans even though they have strong fundamentals and good credit. Self-employed borrowers in particular have suffered from a lack of products during the pandemic, even though many of them were financially unscathed.
With low levels of liquidity, the non-QM space largely dried up in the spring. Some specialized lenders went out of business while others pivoted to conforming loans. All the while, large retail banks tightened lending standards and large nonbanks mostly focused on executing purchase and refi loans of the conforming, conventional variety.
Only in the last quarter, as the economy has stabilized and vaccinations have accelerated, have lenders really returned to the non-QM arena.
The release of Prime Jumbo comes just days after UWM imposed a Monday deadline on brokers to sign an addendum. In its ultimatum, UWM said brokers couldn’t send loans to UWM if they were doing business with Rocket Pro TPO and Fairway. Brokers would be fined $50,000 or more if they originated a loan with Rocket or Fairway.
Both Detroit-area companies, which are the two largest mortgage originators in the country, have declared victory.
UWM said that of the 4,600 brokers who did business with UWM and Rocket or Fairway, roughly 3,000 accepted the addendum. It said 400 brokers declined the addendum and 1,200 have not responded. A lack of response means brokers cannot originate new loans with UWM.
Rocket, on the other hand, said it was ridiculous to believe that 10,000 broker partners would “bend the knee” to their rival. Rocket also said it retained 22 of their 25 biggest broker partners and even poached one of UWM’s top broker shops.