United Wholesale Mortgage’s president and CEO Mat Ishbia shared on social media a remarkable chart this spring showing the growth of the broker channel. The graphic, citing Inside Mortgage Finance data, showed that brokers accounted for 24.3% of the mortgage market in fourth quarter 2023, the largest share since 2009.
The numbers add to the drumbeat for a company that has grown to become the largest mortgage lender in America mainly by backing brokers. But UWM also faced intense scrutiny this spring over its lending practices. A news analysis by Hunterbrook Media showed that more than 8,000 brokers last year sent 99% of their business to UWM and sometimes borrowers paid more in closing costs than if the brokers had shopped the loans to other lenders.
Hunterbrook is a new media company with an accompanying investment arm that actually shorted UWM’s stock while simultaneously betting the Rocket Companies’ stock would increase. Hunterbrook also worked with a law firm that filed a class-action lawsuit against UWM the same week the article appeared.
UWM’s Alex Elezaj spoke to Scotsman Guide about the strength of the broker channel. Elezaj referred all questions on Hunterbrook to a UWM statement that says Hunterbrook has numerous ties to Rocket and the author is just a pretend-to-be journalist.
The mortgage broker share of the market reached its highest level since 2009. What’s the reason behind that?
How we think about it is the value of options, the access and personalized service has never been stronger. Consumer confidence is being restored in independent mortgage brokers. And retail LOs (loan officers) are seeing the benefits for themselves and their borrowers. They can be independent and work with many lenders and provide many more options for consumers.
Why are borrowers seeing value in brokers?
Brokers can work with multiple lenders to find the best options for consumers. When they’re looking at the best options, they’re looking obviously at the cost of it, they’re looking at timing, overall service. There’s a lot of things that go into it when the independent broker is shopping on the consumer’s behalf. Things can be confusing for the average consumer. The independent broker, shopping on their behalf, is their advocate to help them sort through everything.
Do you expect the broker share to continue to grow or has it reached a saturation point?
We do expect the broker share to continue to grow as more consumers and more retail loan officers learn the benefits of the wholesale channel across the board.
UWM believes based on NMLS data that 20,000 mortgage originators switched from the retail to the wholesale channel over the past year. Why is that?
Retail LOs are learning the benefits of being independent and they’re also realizing the captive nature of retail has limited their ability to provide options to their borrowers. This coupled with the reality that the technology and the service available with wholesale lenders is far superior to what many have access to in retail.
Has market dynamics and mortgage company layoffs led to the shift though?
There’s certainly more security and certainty in the wholesale channel, making it more appealing to LOs that work for large banks and retail lenders.
A Hunterbrook Media analysis claims that too many brokers rely on UWM almost exclusively and sometimes it wasn’t the best deal for the client. Is that fair criticism?
As I mentioned earlier, you can refer to the statement UWM posted across social channels on April 9th for that.
What ensures a mortgage broker’s independence?
Brokers have access to over 70 lenders that they can sign up for. And they are not captive to a single lender like an LO at a retail bank. So, they have plenty of options to choose from.
Banks have pulled back from the mortgage market. You say that banks can’t compete with brokers. Isn’t it more complex than that?
No, the reality is that independent mortgage brokers deliver better and tailored mortgage options that consumers don’t get from a rigid bank lender.
It’s been a rough year and a half for the mortgage market. Rates have been slow to fall. Why should mortgage professionals be hopeful?
Rates will eventually drop. When they do, there’ll be no one more prepared than the broker channel and obviously UWM. We’re excited about ‘24. It’s a very positive year for us and, all of the investment and training and development we’re making is going to make ‘25 and ’26 even better. We’re looking forward to great years in the mortgage business and here specifically at UWM. ●
