Gerard Scimeca – co-founder, CASE
May 10, 2021
It has been over two months since Mat Ishbia’s Facebook Live tirade, and the mortgage industry is still struggling to make sense of United Wholesale Mortgage’s unparalleled ultimatum to brokers.
Why would the leading wholesale mortgage lender cut off independent brokers’ access to two of the other largest mortgage lenders — Rocket Pro TPO and Fairway Independent — and inhibit brokers from best serving their clients: home buyers and homeowners looking to refinance?
Ishbia has claimed it has all been in the interest of independent brokers, but experts across the board have called it “bizarre,” “unethical,” and “anti-competitive,” and suspect the move to be more of a knee jerk reaction to Fairway and Rocket’s continued growth in the wholesale mortgage market than anything else. The National Association of Mortgage Brokers and others, even questioned its legality.
Now, despite missing their goal of getting 80% of independent mortgage brokers locked in, Ishbia has declared victory. But what may be a victory for UWM in his eyes is certainly a loss for consumers, brokers, and the free-market in the long-term.
Mortgage brokers play a key role in helping consumers navigate the financing process, leveraging competition between big banks and other mortgage servicers to find the best borrowing terms and rates available. But they are only able to meet the needs of homebuyers and those looking to refinance when they have access to the full scope of lenders. This is especially important for low-income or credit-challenged borrowers, who might struggle to find affordable financing from some lenders.
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