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UWM & Rocket both declare victory in broker war

Where did the big broker shops end up?

In the wake of an ultimatum that mortgage brokers couldn’t use Rocket Pro TPO and Fairway Independent Mortgage while still sending loans to United Wholesale Mortgage, Mat Ishbia declared victory.

In a statement issued after Monday’s deadline, the president and CEO of UWM said that more than 10,000 broker shops have pledged to no longer work with Rocket and Fairway, whom he said have been working behind the scenes to destroy the broker channel.

“I’ve received hundreds of calls and emails from mortgage brokers across the country and have been blown away at the positive response we’ve received, along with the sheer number of shops who have locked arms with us because they felt it was the right thing to do,” Ishbia said. “We’re going to be able to look back at this as a pivotal moment that helped catapult independent mortgage brokers’ growth.”

However, such a declaration leaves out important context. Before Ishbia issued his ultimatum on March 4, UWM worked with roughly 12,000 broker shops. Though Ishbia initially said the edict would force about 3,000 brokers to make a decision, UWM later said 4,600 broker-owners were affected. Of those 4,600, UWM said about 3,000 accepted the addendum. About 400 declined to sign and 1,200 never responded, which means they are not able to send new loans to the Pontiac, Michigan-based lender.

Critics of the move say that roughly two weeks after the ultimatum was issued, UWM now has 1,600 fewer brokers that can send loans to the mortgage giant, which does more purchase business than any other company in America. While Rocket and Fairway can generate business in retail and consumer direct channels, UWM’s path for growth relies exclusively on increasing the number of brokers and cementing more of them as clients. The broker channel is currently around 20% of the overall mortgage market. Ishbia wants it to be one-third of the market by 2025, with UWM at roughly 50% of marketshare in wholeasle.

Like UWM, Rocket, easily the biggest mortgage lender in America having originated about $320 billion last year, expressed similar jubilation on Tuesday.

“Rocket Pro TPO has already grown its market share since UWM’s announcement and will continue to do so in the weeks, months and years ahead,” a company spokesman said. “More than 9,000 brokers stood up and said no to UWM’s ultimatum. They see the writing on the wall and are not signing up to become a controlled loan branch of UWM. In addition to our thousands of tried-and-true broker partners, we had hundreds of new brokers submit an application to partner with us yesterday as they chose freedom over mandates. In fact, two of the largest broker owners who previously did no appreciable business with our company rejected UWM’s addendum and are now building a relationship with Rocket Pro TPO.”

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