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United Wholesale Mortgage CEO Mat Ishbia has offered a simple explanation for explosive allegations that his company “corrupted” mortgage brokers to defraud “hundreds of thousands of borrowers out of tens of thousands of dollars.” billion” in fees and costs.
The accusations, which Ishbia alleges were concocted by UWM’s fiercest rivals and were made public on Tuesday by a hedge fund affiliate that took a short position in UWM, also amount to spending targeting the largest U.S. mortgage lender. the basis for litigation. Rocket Mortgage and its founder Dan Gilbert.
“This is Rocket Mortgage and Dan Gilbert doing Rocket Mortgage and Dan Gilbert,” Ishbia told reporters Thursday. “That’s exactly how it’s funded.”
Rocket Mortgage and newly formed media company Hunterbrook Media published scathing reports on UWM’s alleged business practices, calling Ishbia’s accusations baseless.
Sam Koppelman, co-founder of Hunterbrook Media called isbiah’s take There are “baseless conspiracy theories” on the X social media platform (formerly Twitter).
“Neither Rockets nor Gilbert have agreed to provide us with comment,” Kopelman posted on X. “Meanwhile, Ishbia has yet to point out a single factual error in our reporting. Matt, are you ready for an interview?”
Hunterbrook Capital, a hedge fund owned by Hunterbrook Media, held a short position in UWM, betting that the company’s stock price would plummet. It also bought shares of Rocket companies, meaning it bought stocks in the hope of rising in value — perhaps fueling Ishbia’s suspicions.
(UW had not responded to a request for comment on Ishbia’s allegations as of publication time Friday).
A spokesperson for Rocket Mortgage told Inman that Gilbert and Rocket have no relationship with Hunterbrook Media.
“Dan Gilbert and Rocket Mortgage have no investment, other financial interest or relationship with Hunterbrook Media,” Rocket Mortgage spokesman Aaron Emerson said in a statement to Inman. “The professional investigation speaks for itself and appears to be based on factual, publicly available information discovered by the reporters who conducted the investigation.”
The allegations detailed in the Hunterbrook Media report are serious and are the basis for a lawsuit seeking class action status in federal district court on behalf of UWM borrowers who were allegedly harmed.
The lawsuit alleges that UWM prohibits mortgage brokers who provide borrowers to UWM from sending loan applications to competitors Rocket Mortgage or Fairway Independent Mortgage, resulting in an increasing number of mortgage brokers “artificially directing loans to UWM.”
In doing so, UWM violated the Racketeer Influenced and Corrupt Organizations Act (RICO) and the Real Estate Settlement Procedures Act (RESPA), lawsuit alleges.
UWM denies the accusations, calling them unethical and potentially fraudulent.
“As you would expect, the hedge fund deliberately misled the public masquerading as a news report, which itself was filled with inaccuracies and incorrect information,” UWM said in a statement to Inman on Wednesday.
For Ishbia, it’s personal
While the legal issues raised by the lawsuit will likely be decided in court, the rivalry between UWM and Rocket has long been personal — at least to Ishbia.
Ishbia accused the Rockets and Gilbert of being behind the allegations against UWM, which were posted on social media by reporter Duane Rankin, who covers the Phoenix Suns, the team that Shibia and his family purchased the NBA team last year.
Ishbia’s popular works
“That’s Rocket Mortgage and Dan Gilbert doing Rocket Mortgage and Dan Gilbert.”#sunteam Team owner Mat Ishbia reports on his United Wholesale Mortgage business in Hunterbrook. pic.twitter.com/gtzsa99Dd0
— Duane Rankin (@DuaneRankin) April 4, 2024
Excerpts from Thursday’s interview with Mat Ishbia Posted by: Gannett reporter Duane Rankin reports X.
Gilbert is co-founder and chairman of Rockets Mortgage parent company Rocket Corp. and owner of the Cleveland Cavaliers.
In this position, Gilbert is the only NBA owner who does not support Ishbia’s purchase of the Suns and their sister WNBA team, the Phoenix Mercury. Abstained in a 29-0 vote Other owners approved sale in February 2023.
Ishbia’s $4 billion purchase of the Suns brings a longstanding business rivalry between the nation’s largest mortgage lenders to the basketball court.
In an effort to surpass Rocket, UWM issued an “all-out” ultimatum in 2021, asking mortgage brokers who want to do business with UWM not to send loan applications to rivals Rocket Mortgage or Fairway Independent Mortgage.
During March 2021 Facebook live eventIshbia told the mortgage broker, “If you work with (Rocket and Fairway), you cannot work with UWM, effective immediately.”
Ishbia has previously accused “full-tail” lenders, which operate both retail and wholesale pipelines, of trying to exclude mortgage brokers when customers seek their next loan. Ishbia and others claim that if a borrower a mortgage broker sends to Rocket later decides to refinance, the full-tail lender will seek to issue the loan directly to the borrower, cutting the mortgage broker out of the process. outside.
Ishbia’s allies in this cause include Anthony CasaSenior executive in the mortgage industry, serving as chairman of the industry group from February 2018 to July 2020 Association of Independent Mortgage Professionals (Aimee).
In 2017, Casa was a founding member of BRAWL (Brokers Rally Against Full Tail Lending).
“Mortgage brokers have known about wholesalers’ shady tactics for years, but we just didn’t have a say before,” Casa said in a statement. brawl press release that year. “We are speaking out now, urging brokers to avoid doing business with wholesale retailers as doing so sets themselves up for long-term failure.”
Casa resigned as AIME chairman in 2020 after he was indicted for allegedly filming himself making lewd, sexual remarks to the wife of a Rocket Mortgage executive at a social gathering. But Ishbia and Casa continue to support AIME and the political action committee it formed in 2022, the Brokers Action Alliance Political Action Committee (BACPAC).
One of the more sensational details in the Hunterbrook Media report is a voicemail Ishbia allegedly left for Casa in November 2022, after UWM’s surge in home loan business helped it surpass Rocket to become the nation’s largest mortgage lender.
Voicemail containing profanity, the message has been Post to Reddit and edited by Inman as follows, transcribed in a lawsuit filed against UWM by the law firm Boies Schiller Flexner:
“We f**ked those rockets down,” Ishbia allegedly said. “Fuck ’em. We’ll stick it to them forever. Fuck those guys. We were number one. We kicked ’em out.” .The agent is number one. UWM is number one. You are number one. We are all number one. Fuck them. I hate them with all my fucking heart. We will continue to kick their ass every damn day . . . ”.
(Casa had not responded to Inman’s request for comment as of publication time Friday).
Rocket’s top brass added fuel to the fire, with the head of Rocket’s wholesale division describing Ishbia as a “playground bully” and pledging to compensate mortgage brokers who ignored UWM’s lawsuit’s “all in” ultimatum.
“Whether this is legal or not is not my opinion, but it does set a very, very bad precedent,” former Rockets executive Bob Walters told Inman in 2021. “The ultimate loser is Mortgage brokers.” If you talk to any mortgage broker, they’re going to be furious. Some people feel they have to do what’s necessary to protect their pipeline, but they’re angry because they know the broker knows their superpower is their choice. They don’t want to be UWM’s retail platform. “
In an effort to generate more business with homebuyers, Rocket Pro TPO, the division of Rocket Mortgage that works with mortgage brokers, launched several initiatives in fall 2021 designed to strengthen Rocket’s value proposition to brokers.
Ishbia “Playground Bully”
But after ceding its title as the nation’s largest mortgage lender to UWM and falling into the red in 2022, Rocket is again pushing to expand its wholesale lending pipeline.
In a February 2023 pitch to mortgage brokers, Rocket Pro TPO executive vice president Mike Fawaz accused Ishbia of using his power to “intimidate and coerce those with less power, and we all Knows that this happens every day. He knows that small brokers don’t have the financial means to fight UWM in court. He is a playground bully who takes kids’ lunch money every day. You know it and the brokers know it . Well, there’s a bigger kid on the playground, and that’s Rocket.”
Fairway Independent Mortgage is another “full tail” lender targeted by UWM. announced last month The company will close its wholesale mortgage division and will shift the company’s business model to “100% retail origination.”
Despite the intense rivalry between UWM and Rocket, Rocket denies that founder Dan Gilbert has any personal animosity toward Ishbia.
“As for Dan and Matt, there is no relationship,” Rockets spokesman Emerson told ESPN. “They’ve never met. From Dan’s perspective, there’s no competition.”
in a April 2nd Story Regarding the competition among NBA team owners, ESPN pointed out that Ishbia has different feelings.
In a May 2023 podcast, Ishbia said Gilbert “didn’t like me and I didn’t like him.”
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