Crain's Detroit Business: Matthew Roling on UWM CEO ultimatum


Mat Ishbia's metaphorical bomb was launched from Pontiac and targeted 30 miles south down Woodward Avenue. The impact, however, could be felt nationwide by mortgage brokers who have been dependent on Ishbia's company, United Wholesale Mortgage Corp., and his chief rival, Detroit-based Rocket Mortgage, to close deals. Both of the companies are juggernauts in the industry, and have helped to fuel a home-buying and refinancing surge for the last several years. Ishbia, the 41-year-old president and CEO of Pontiac-based UWM, sent a shock to the mortgage industry last Thursday when he announced that the thousands of independent brokers across the country who send potential mortgage deals to both his company, the nation's second-largest lender, and Rocket Companies, the nation's largest, must now choose one or the other. Ishbia alleged that Rocket, as well as Madison, Wis.-based Fairway Independent Mortgage Corp., have been involved in "underhanded" business dealings to undercut the wholesale sector, which UWM dominates, in the hopes of boosting the retail side of the industry, dominated by Rocket. Ishbia said that based on conversations with brokers with whom his company works, the two competitors have been paying loan officers and real estate agents to bring them business. Experts say the allegations levied by Ishbia at the other two companies are rather serious in nature. "That's a pretty powerful allegation," said Matthew Roling, and adjunct professor of finance at Wayne State University and the school's executive director of the Office of Business Innovation at WSU's Mike Ilitch School of Business. Roling, who previously worked for the Rocket Mortgage-affiliated Rock Ventures, questioned whether what Ishbia is alleging put Rocket and Fairway in violation of the federal Real Estate Settlement Procedures Act, or RESPA. "It might pass the letter of the law with RESPA ... but it still smells bad," Roling said. "If what (Ishbia) said is true ... it seems like they're paying people to steer clients in a certain direction, which maybe is not a kickback per se, but it isn't that far away from one." As such, Roling wondered why Ishbia wouldn't simply rally his thousands of brokers to pursue a class-action lawsuit.

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