Utopia Talk / Politics / #2 mortgage co. to block Quicken

earthpig GTFO HOer	Fri Mar 05 01:30:42 The second largest mortgage lender in the country is going to blacklist and block mortgage brokers who continue to use the largest mortgage lender in the country. 10 day deadline to pick a side. Context: Mortgage rates are up, refi boom over, about to be a purchase focused mortgage market (refi and purch are the two basic products), but oh wait there are less than half as many seasonally adjusted homes for sale as there "should" be for this time of year (ballpark <500k homes for sale v the "should be" number of a tad over 1m). So basically, industry production is likely to contract 60% or 70% in a single quarter, after having the best year ever industry-wide. This morning, on a facebook live thingie I was on, this bombshell is dropped. More context, mortgage specific unless otherwise noted: A "wholesale" loan is one through a broker, a "retail" loan is one wherein the consumer calls the lender/bank directly. Rocket/Quicken [RKT] is #1 in: overall volume, refi volume, retail. Trying to become a general fintech company, expanding to car loans and other stuff, goal is to be "the amazon of consumer finance." They are #2 in purchase mortgages. 1/3 of their volume comes from local independent mortgage brokers, the rest from people calling their call center. UWM [UWMC] is #1 in: Purchase mortgages, wholesale. Laser focused on just mortgages. Their goal is to become #1 in overall volume (even though they do not even have a retail consumer-direct division), in no small part by just growing the overall mortgage broker channel (5% market share 5 years ago, 20% today). They are #2 in refinances. 100% of their volume comes from local mortgage brokers, they will not directly work with a consumer for a mortgage. Wells Fargo is in #3 position, 3rd largest mortgage lender in the country. I do not personally know anyone who uses Fairway. http://www...king-with-fairway-and-quicken/ UWM to block [mortgage] brokers working with Fairway and Quicken United Wholesale Mortgage, the top wholesale lender in the nation, announced on a Facebook live Thursday that it will no longer partner with brokers who also work with Rocket Mortgage and Fairway Independent Mortgage Corp. Mat Ishbia, president and CEO of UWM, gave brokers and owners a deadline of March 15 to sign an addendum saying they are not working with those two lenders. “If you work with them, can’t work with UWM anymore, effective immediately,” Ishbia said. “I can’t stop you, but I’m not going to help you, help the people that are hurting the broker channel, and that’s what’s going on right now. “We don’t need to fund Fairway Independent or Rocket Mortgage to try to put brokers out of business. We don’t need to do that. If you want to do that as your own deal, no hard feelings, but you can’t work with UWM anymore,” he said. According to the announcement, the decision comes in response to Rocket and Fairway participating in actions including soliciting loan officers away from brokers and working directly with real estate agents to cut brokers out of the entire process. On Feb. 1, the wholesale mortgage lending division of Rocket Companies launched a national mortgage broker directory on its website, and this week launched a jumbo product for brokers. Ishbia pointed to the “other 75 great lenders” and said that there are other lenders where he doesn’t agree with their business practices, “but these two are going after the broker channel.” The news is just one of three announcements from the wholesale lender, which announced the launch of Prime Jumbo, coming March 17, with LTV up to 89.99%, and sharpened pricing across the board. In May 2020, UWM launched its “Conquest” program to enable brokers to go after new customers, even ones that a broker lost to another lender just weeks earlier. Ishbia said that the program’s “been great. It’s had it’s in place,” but moving forward, “We’re gonna pivot here at UWM, we’re all gonna do it together. Conquest will still be out there, but our regular programs, our elite programs, our non-elite programs, our regular conventional, FHA, VA, all those programs, those are going to be the focus.” In response to UWM’s announcement, Austin Niemiec, Rocket Pro TPO vice president, said in an interview with HousingWire: “Brokers are incredibly smart and savvy mortgage professionals and business owners. They are dialed in to their industry. And we know that we need to provide value, and we need to support them. And if we don’t, it’s their decision and their choice to fire us. But what you’re seeing happen is the complete opposite. “This isn’t a move to support the broker community, it actually harms brokers. This isn’t a move to support the consumer, it actually harms the consumer. This is a move to support UWM, and UWM alone. A consumer goes to a broker because of choice,” Niemiec added. “A broker’s competitive advantage is choice, it is their super powered. By UWM dictating brokers to eliminate one of their choices, it harms the broker and harms the consumer, period.” Fairway declined to comment. HW Media CEO Clayton Collins discussed this breaking news with Mat Ishbia during HousingWire’s Spring Summit on Thursday. An on-demand version of the session will be available exclusively to HW+ members after the summit.
Seb Member	Fri Mar 05 02:59:10 How on earth is that legal? Isn't that straight out anti-competitive practice?
Sam Adams Member	Fri Mar 05 14:17:27 "less than half as many seasonally adjusted homes for sale as there "should" be for this time of year" Is that because fewer are being sold or because those that are being sold are on the market for less time because the demand to get out of cities is so high?
earthpig GTFO HOer	Fri Mar 05 22:11:19 "Is that because fewer are being sold or because those that are being sold are on the market for less time because the demand to get out of cities is so high?" Fewer are being listed for sale. Initially people didn't want to have a bunch of plague bearers through their homes. Then once they got over that, it was a little bit of "hmmm but if I *sell* in this market, that means next I have to *buy* in this market, and this market totally sucks for buyers, so I'll just stay put." Feedback loop from there, and here we are. "How on earth is that legal?" A bunch of sea lawyers are having those fights. One point is that Pepsi has fast food places sign contracts saying they can only sell Pepsi family soda all the time. Another point, one that I think is more relevant, is that there aren't just two wholesale mortgage lenders. There are about 75. So this isn't Pepsi saying "Pepsi only or you can't have ANY Pepsi," this is more like Pepsi saying "no Coke or Safeway brand, but there are 100 other soda brands you can sell and we will still sell you our product... just no Coke or Safeway." And, really, UWM's only recourse is to say "fine, then we don't want your business." I would still have 70+ other options. My choice is Option A being the set of lenders that is 74+UWM, or Option B being the set of lenders that is 73+RKT+Fairway. Pragmatically UWM > RKT any day of the week, even if not for RKT poaching my customers, so it wasn't a super hard choice for me, even though I wasn't happy about UWM forcing me to make a choice. Their processes, pricing, value, etc, are sexy and must-have, RKT is meh and commodity.
earthpig GTFO HOer	Fri Mar 05 22:11:59 @SA - http://www...-have-all-the-houses-gone.html
earthpig GTFO HOer	Fri Mar 05 22:40:44 "How on earth is that legal?" I mean, there's this: http://archive.fo/PS9e3
Sam Adams Member	Sat Mar 06 00:30:01 Glad we bought a few years back. Whew. It must be crazy trying to buy right now. Everyone trying to leave the cities and nothing available.
Y2A Member	Sat Mar 06 01:32:01 as soon as the vaccine is widely available cities will thrive again.
Nimatzo iChihuaha	Sat Mar 06 05:27:33 Why wouldn’t it be legal to sign exclusive deals? Isn’t that effectively what is going on here? What am I missing?
Sam Adams Member	Sat Mar 06 13:58:19 "as soon as the vaccine is widely available cities will thrive again." Why would anyone with a choice choose to live in a city?
Seb Member	Sat Mar 06 16:15:08 Nim: A company leveraging it's wholesale position to force retailers to exclude it's rivals thus depriving consumers of choice.
earthpig GTFO HOer	Sat Mar 06 16:30:34 "Why wouldn’t it be legal to sign exclusive deals? Isn’t that effectively what is going on here? What am I missing?" It's not an exclusivity contract. UWM isn't saying "you have to use us." They are saying "if you want to use us, you can't use these specific two competitors or we will cut you off, but you are still free to use any of 70+ others." "as soon as the vaccine is widely available cities will thrive again." I actually disagree. I think a great migration is underway and here to stay. COVID was just the straw that broke the camel's back. We've seen this before... 1950s, cars were in, suburbs and white picket fences were hot, so poor folks in the burbs got gentrified out of the burbs and into the cities. More recently it's been the opposite, urban cores have been hot so poor folks have been getting gentrified out. And I think we're back to wide open spaces and SFRs being what people want. I was seeing where people with means to choose were looking to buy all pandemic, these weren't "until the pandemic is over" choices, these were 5-10 year choices. Everyone in Sacramento bitching about Bay Area people moving to Sac and making RE unaffordable to them.
Sam Adams Member	Sat Mar 06 16:41:30 "Everyone in Sacramento bitching about Bay Area people moving to Sac and making RE unaffordable to them." And then all the sac folks move up here and overcrowd my trailheads and river access points and drive their priuses slowly on my mountain roads!
Y2A Member	Sat Mar 06 18:55:06 "Why would anyone with a choice choose to live in a city?" Because cities are cultural, economic and social hubs.
Nimatzo iChihuaha	Sat Mar 06 19:34:31 Progress in connectivity and mobility is rapidly making them obsolete. The cultural and social hubbing does fine without cities and corona has accelerated all of this. More people will work from home indefinitly, corona forced this and the results have been pretty good. This alone will have an impact on cities, bigley. Even if you are to be in the office 2 days a week, then a longer commute could be worth it, since you work 3 days from home. On the other hand when I go to sleep I can see the belt of orion from my bed, not only because there is less light pollution, but also because there are no building in the way. What art and creations are we losing out, because most people can’t see the actual natural night sky? Cities are overrated, the future is silicon.
Sam Adams Member	Sun Mar 07 01:09:14 "Because cities are cultural, economic and social hubs." Before the internet they were.
habebe Member	Sun Mar 07 01:27:52 I read something about quicken was supposed to be the next reddit stock, speculation lead the CEOs net worth to jump 25 billion, and then drop by 24 billion in one week, that's still a good week.
earthpig GTFO HOer	Sun Mar 07 01:40:45 "I read something about quicken was supposed to be the next reddit stock" I purchased RKT 2 days before their Q4 2020 earnings announcement for $19.85, and sold at $38 a week later. :)
earthpig GTFO HOer	Sun Mar 07 01:41:17 It's at $25 now.
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