![]() The wholesale mortgage business is going to be cutthroat. A Way To Stand Outĭespite my feeling that this may not have been a battle worth fighting, I can understand what UWMC is trying to do. The takeaway for me is that this is a pyrrhic victory for United Wholesale Mortgage and shouldn’t weigh too much on your decision to buy UWMC stock. Before you knew it, there was an app that let consumers compare mortgage products in seconds on their phone.Īll of these things in combination diminished the need for a mortgage broker. This prompted many lenders to simply use in-house loan officers.Īt the same time, the smartphone revolution began. ![]() And with the passage of the Dodd-Frank law in 2010, lenders were required to verify a borrower’s ability to repay and faced significant penalties for errors on mortgage applications. In its aftermath, most if not all of the exotic mortgage products went away. As a result, many homebuyers were eager to allow a mortgage broker to analyze and compare the various mortgage products. In 2006, there were a dizzying amount of products. Mortgage brokers work with wholesale mortgage brokers like UWM and Rocket. This was the peak of the real estate bubble. To understand the reason why, consider the year 2006. Since 2006, which is considered the industry’s peak, the number of mortgage brokers has dropped by 45%. Mortgage Brokers Are a Dying BusinessĪccording to National Mortgage News, mortgage brokers are in decline. However, while it may be that UWM has won this battle, it may be a case of the juice not being worth the squeeze. And Ishbia claims that less than 500 out of 12,000 brokers are continuing to partner with Rocket Mortgage. ![]() ![]() You have to appreciate the gumption of UWM’s CEO Mat Ishbia. Specifically, UWM announced it was no longer going to work with any mortgage broker that also did business with its rival Rocket Mortgage, part of Rocket Companies (NYSE: RKT). As it turns out, the company - as the indirect parent of United Wholesale Mortgage - made an aggressive and controversial decision regarding its relationship with mortgage brokers. ![]()
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