Brokers Are Banned

Brokers Are Banned

April 2, 2021
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Mortgage brokers are a fiercely independent bunch. That’s why they are mortgage brokers; they don’t like anybody telling them what to do.

That’s why the proverbial s**t hit the fan in early March when Mat Ishbia, president and CEO at United Wholesale Mortgage, gave his customers an ultimatum – them or us.

Or, as he said in a Facebook post, UWM won’t do business with you if you work with either Rocket Mortgage or Fairway Independent Mortgage.

The reaction, as you might expect, was swift. “We’re not even sure this is legal. It certainly isn’t ethical. And it doesn’t represent the American way of free enterprise,” National Association of Mortgage Bankers President Kimber White said in a statement.

White, a partner in RE Financial Services in Oakland Park, Fla., ruminated further, saying UWM’s edict “runs counter to the spirit and independence” that is the backbone of the brokerage business. “You should be allowed to work with whomever you want and who offers the best product and customer service,“ he posted. “Not a company that dictates your business model to you. At NAMB, we support all lenders and your choice for whomever best supports you, your business, and your borrowers. We’re NAMB for all.”

The association leader asked his members what they thought: “If a lender dictated to you what others lenders you could work with, you would...?“

Not surprisingly, 70 percent of the 854 members who responded quickly said they didn’t like the idea, not at all – 354 said they would disregard such a pronouncement and 245 would report the company to state and local authorities for being anti-competitive.

What is surprising, perhaps, is that 255 brokers – nearly one out of every three – said they would comply.

I’ll get to what the protagonists in this little drama have to say in a moment. First, though, let’s take a look at some of the thinking out there in the hinterlands.


Posting on the NAMB’s website, David Krichmar in Houston, Tex., seemed to accept the inevitable. No, he didn’t like UWM’s line in the sand. “Us brokers have no choice and Ishbia knows that,” the VA loan specialist wrote. “We need one-day turn times more than we need Quicken,” Rocket Mortgage’s former name.

Still, the Texas broker was not pleased about having to make a choice. “This is market manipulation,” he said. “Something needs to be done to stop this. It’s a strong-arm tactic and leaves us brokers no choice. We need UWM more than Quicken, even though both are good for our industry. This requires a legal and regulatory response.”

On the other side, Michael Rankin of ClearPath Mortgage Solutions in Latham, N.Y., agreed with NAMB’s White’s thinking at first. But “after further deliberation,” he posted, he doesn’t believe the UWM throwdown is a threat to free enterprise.

As Rankin sees it, Ishbia has taken a stand against unethical, deceitful practices – “ones I frankly was unaware of...Brokers are mad because Quicken has some great technology and pricing but I’m willing to sacrifice that for the greater good of preserving the broker channel.“

“I’m genuinely proud of what Mat and UWM have done,” agreed Shah Tehrany of Madison Mortgage Services in Lake Success, N.Y. “It stops here. No further. It’s time for Quicken and Fairway to exit a channel they don’t belong in,” he posted on UWM’s facebook page.

Richard Miller of Bridgeway Financial in California’s Bay Area is one broker who seems angry, as Rankin suggested. But with Ishbia, not Rocket or Fairway. He said he would call UWM, “state my case and not use them.”

But Chris Burleson of Knoxville (Tenn.) Mortgage Brokers took a “so what” position: “Who cares,” he posted. “Get back to work.”



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