Brokers who originate loans with United Wholesale Mortgage are concerned about working with Rocket Pro TPO because they have a retail channel, but Rocket Pro TPO Executive Vice President Mike Fawaz said they have nothing to worry about.
“I genuinely believe that they are two different companies,” Fawaz said Saturday night after leaving the Originator Connect in Las Vegas.
He said they’ve built a fire wall between retail and wholesale to make sure there’s a separation.
Originators, who declined to give their names, said they feared that their loans would be stolen by the retail division at Rocket, but Fawaz said there’s nothing to worry about.
He said when these originators pull credit borrowers are going to get 60 calls from interested companies looking to get them a loan. He said it’s not just Rocket, but everyone is trying to get to them.
“If you’re working for Rocket TPO, you eliminate Rocket retail as competition,” Fawaz said. He said if a loan officer in wholesale is working on a loan and the borrower reaches the retail division, someone there will make sure they know they are working with the wholesale broker and won’t touch the loan.
“A lot of people like to tell our story,” Fawaz said. “They’re going to tell the story their way.”
So how will he reclaim the narrative?
Fawaz said Rocket is a big company and they do mortgages all day long. “If you do business with Rocket TPO, then you’re working with one of the largest lenders in the country and you’ve eliminated the competition,” he added.
“It’s the opposite of what others try to spread as the narrative,” Fawaz said.
Many brokers, as evidenced by Friday night’s Brokerage Brawl in Las Vegas, have been forced to choose between rivals UWM and Rocket Pro TPO.
The broker ultimatum that UWM issued in 2021 has stirred up plenty of controversy, as well as a few lawsuits. The legal battle began when UWM sued AML, a high-volume California-based brokerage, in February 2022 for continuing to do business with UWM competitor Rocket Companies, after AML signed the “All-In” Initiative UWM established in March 2021. UWM’s lawsuit stated that AML submitted 560 loans to Rocket Mortgage and Fairway Independent Mortgage. Due to a stipulation in the contract that any broker that continues to do business with Rocket or Fairway while working with UWM would face fines upwards of $5,000 per loan or $50,000, whichever was greater, UWM claims AML owes it $2.8 million.
A few days later, AML counter-sued, claiming that UWM Director of National Accounts Bryan Miller verbally assured AML Chief Operating Officer Dean Lob over a telephone call that UWM would not seek to enforce the ultimatum and liquidated damages provision. The lawsuit also describes other promises UWM made to AML, like improving their pricing. The broker argued promissory estoppel should apply, making the ultimatum invalid and unenforceable.
UWM filed a motion asking the court to dismiss AML’s counterclaims, which it did, but only in part this past January.
“AML’s fraud and promissory estoppel claims fail because they are based on an alleged oral promise not to enforce the terms of the contract,” UWM states in its motion to dismiss. “This, by definition, is a contradiction of the express, integrated agreement, and reliance on such an alleged promise is unjustifiable as a matter of law.”
The court order explains that AML had already agreed to the ultimatum and associated damages before UWM made the assurances not to enforce those provisions. AML acknowledged the public announcement of the ultimatum on March 4, 2021, and received an email about the amended agreement the next day, yet it continued submitting loans to UWM after that date. The court states that it constitutes acceptance of the ultimatum by performance.
Fawaz, who spoke at Originator Connect, said he truly believes in the broker community and they really need to come together.
“They try to make it sound like retail is this big scary thing,” Fawaz said. “And I always say at the end of the day you’re working with Rocket Pro TPO. You’re not working with Rocket’s retail side.”
However, the fact they have retail is a benefit because it allows them to do things such as free credit reports, One +, and a number of additional services.
“Sometimes we miss out on telling the story,” Fawaz said.
Brokers benefit from these free services because of the debt service Rocket has which is possible because they have retail. “I don’t hide behind it. I’m proud of it,” Fawaz said.
As for the narrative, “There’s always going to be the naysayers and the doubters,” Fawaz said.
He said he opened one of his events recently with the word "desperate." He said it’s sad in a competitive market that someone would want to spread rumors that aren’t really true. He said he’s over it.
In the meantime, he said he’s relying on the shops that work with Rocket to counter that narrative in the broker community.
“It doesn’t matter who you work with,” Fawaz said.
He said he gave his number to brokers who don’t work with them and asked them to call him if they need anything. He said he does it because he loves the broker community.
“Step up to the plate because people need it,” Fawaz said.
