The low interest rates we’ve experienced over the past few years have made it possible for millions of Americans to buy new homes, refinance properties, and pull out some equity to ease the pinch caused by the lockdowns.
Families have been able to increase their liquidity and pump billions into the economy when it was desperately needed. Consumers, real estate agents, lenders, and mortgage brokers have all benefited. So Thursday’s speech via Facebook by United Whole Mortgage CEO Mat Ishbia, in which he delivered essentially an “ultimatum” to his company’s brokers and partners, seems odd.
Ishbia told brokers they had to make a choice – either work with UWM or else. Anyone working with Quicken Loans/Rocket Mortgage and Fairway Independent Mortgage wouldn’t be getting any more business from him.
Some might call that the hard sell. Others might say it’s the kind of threat that could provoke intervention by federal regulators looking for evidence of restraint of trade. Either way, it’s a bad deal for consumers who have or who planned to capitalize on the current low rates.
Ishbia’s play didn’t go over well among industry observers. Mortgage Bankers Association President and CEO Bob Broeksmit issued a statement that said, “Consumers are best served when they have choices created by a robust, competitive market that offers a multitude of loan prices, products, and service levels. Our mortgage market is extraordinarily competitive, with thousands of lenders, multiple delivery channels, and varying business models. MBA does not condone activities designed to thwart competition in the mortgage market and limit loan options available to borrowers.”
What Ishbia wants amounts to a “publicly traded nonbank,” Inside Mortgage Finance reported, “altering its broker contract, telling third-party salespeople if they violate this ‘representation and warranty’ they must pay the wholesaler damages ranging from $5,000 to $50,000.”
Chris Whalen of Whalen Global Advisors LLC, a frequent contributor to the National Mortgage News, said Ishbia’s demands were a direct result of “mortgage lending volumes slowing” forcing firms to fight over brokers and production.
Copyright 2021 Peter Roff. Distributed exclusively by Cagle Cartoons newspaper syndicate.