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United Wholesale Mortgage CEO Mat Ishbia is offering a simple explanation for explosive allegations that his company has “corrupted” mortgage brokers in order to cheat “hundreds of thousands of borrowers out of billions of dollars” in fees and costs.
Ishbia claims the allegations — made public Tuesday by a company affiliated with a hedge fund that’s taken a short position in UWM, and which also form the basis of a consumer lawsuit against the nation’s largest mortgage lender — have been cooked up by UWM’s fiercest rival, Rocket Mortgage, and its founder, Dan Gilbert.
“That’s Rocket Mortgage and Dan Gilbert doing Rocket Mortgage and Dan Gilbert things,” Ishbia told reporters Thursday. “And that’s just what it’s been funded by.”
Rocket Mortgage and Hunterbrook Media, the newly-launched media company that published the scathing report on UWM’s alleged business practices, say Ishbia’s accusations are baseless.
One of Hunterbrook Media’s founders, Sam Koppelman, called Ishbia’s take “a baseless conspiracy theory” on X, the social media platform formerly known as Twitter.
“Neither Rocket nor Gilbert even agreed to provide us with comment,” Koppelman posted on X. “Ishbia, meanwhile, has yet to point to a single fact we got wrong in our reporting. Mat, up for an interview?”
A hedge fund that’s affiliated with Hunterbrook Media, Hunterbrook Capital, has taken a short position in UWM — a bet that the company’s share price will crash. It’s also long on Rocket Companies, meaning it’s bought shares it hopes will increase in value — perhaps fueling Ishbia’s suspicions.
(UWM had not responded to a request for comment on the basis of Ishbia’s allegations as of publication time Friday).
A spokesperson for Rocket Mortgage told Inman that Gilbert and Rocket have nothing to do with Hunterbrook Media.
“Dan Gilbert and Rocket Mortgage have no investment, other financial interests or relationship to Hunterbrook Media,” Rocket Mortgage spokesperson Aaron Emerson said in a statement to Inman. “The professional investigation speaks for itself and appears to be based on factual, public information uncovered by the journalists who conducted the investigation.”
The allegations detailed in Hunterbrook Media’s report are serious — and are the basis of a lawsuit seeking class-action status in a federal district court to represent UWM borrowers who were allegedly harmed.
In prohibiting mortgage brokers who send borrowers to UWM from sending loan applications to rivals Rocket Mortgage or Fairway Independent Mortgage, the lawsuit alleges that UWM has caused a growing number of mortgage brokers to “artificially steer loans to UWM.”
In the process, UWM has violated the Racketeer Influenced and Corrupt Organizations Act (RICO) and the Real Estate Settlement Procedures Act (RESPA), the lawsuit alleges.
UWM has denied the allegations, characterizing them as unethical and possibly fraudulent.
“As you would expect a hedge fund masquerading as journalism would knowingly mislead the public, the report itself is riddled with inaccuracies and incorrect information,” UWM said in a statement to Inman Wednesday.
For Ishbia, it’s personal
While the legal issues raised by the lawsuit are likely to be decided in court, the rivalry between UWM and Rocket has long been personal — for Ishbia, at least.
Ishbia’s allegations that Rocket and Gilbert are behind the allegations against UWM were posted to social media by Duane Rankin, a reporter who covers the Phoenix Suns — the NBA team that Ishbia and his family bought last year.
Ishbia’s hot take
“That’s Rocket Mortgage and Dan Gilbert doing Rocket Mortgage and Dan Gilbert things.”#Suns team owner Mat Ishbia on Hunterbrook report on his United Wholesale Mortgage company. pic.twitter.com/gtzsa99Dd0
— Duane Rankin (@DuaneRankin) April 4, 2024
Excerpt of Thursday interview of Mat Ishbia posted by Gannett reporter Duane Rankin on X.
Gilbert — the co-founder and chairman of Rocket Mortgage’s parent company, Rocket Companies — is also the owner of the Cleveland Cavaliers.
In that role, Gilbert was the only NBA owner not to back Ishbia’s bid to acquire the Suns and its sister WNBA team, the Phoenix Mercury, abstaining from the 29-0 vote by other owners to approve the sale in February 2023.
Ishbia’s $4 billion acquisition of the Suns brought a longstanding business rivalry between the nation’s biggest mortgage lenders to the basketball court.
In its quest to overtake Rocket, UWM issued an “All In” ultimatum in 2021 that required mortgage brokers who wanted to do business with UWM not to send loan applications to rivals Rocket Mortgage or Fairway Independent Mortgage.
During a March 2021 Facebook Live event, Ishbia told mortgage brokers, “If you work with [Rocket and Fairway], you can’t work with UWM, effective immediately.”
Ishbia had previously accused “whole-tail” lenders who operate both retail and wholesale channels of attempting to cut mortgage brokers out when it was time for their clients to seek out their next loan. If a borrower sent to Rocket by a mortgage broker later decided to refinance, for example, whole-tail lenders would seek to make that loan directly with the borrower, cutting mortgage brokers out of the process, Ishbia and others alleged.
Ishbia’s allies in the cause included Anthony Casa, a mortgage industry executive who, from February 2018 to July 2020, served as chairman of an industry group, the Association of Independent Mortgage Experts (AIME).
In 2017, Casa was a founding member of BRAWL (“Brokers Rallying Against Whole-tail Lending”).
“Mortgage brokers have known about whole-tailers’ shady tactics for years, but we just didn’t have a voice before,” Casa said in a BRAWL press release that year. “We’re speaking up now, and urging brokers to avoid doing business with whole-tailers, because they’re setting themselves up for long-term failure by doing so.”
Casa resigned as AIME’s chairman in 2020 after he was sued for allegedly filming a video of himself making lewd, sexual remarks about the wife of a Rocket Mortgage executive at a social gathering. But Ishbia and Casa have continued to support AIME and a political action committee it launched in 2022, the Broker Action Coalition Political Action Committee (BACPAC).
One of the more sensational details in the Hunterbrook Media report is a voicemail message that Ishbia allegedly left for Casa in November 2022, after UWM’s surging purchase loan business helped it overtake Rocket to become the nation’s largest mortgage lender.
The profanity-laced voicemail, audio of which has been posted to Reddit and redacted below by Inman, is transcribed in the complaint filed against UWM by the Boies Schiller Flexner law firm:
“We f_____g took those c_________s [Rocket] down,” Ishbia allegedly said. “F__k them. And we’re gonna keep f_____g sticking it to them forever. F__k those guys. We’re number one. We kicked the s__t out of them. Brokers are number one. UWM is number one. You’re number one. We’re all number one together. And f__k them. I f_____g hate them with all my heart. And we’re gonna keep kicking their a__ every f_____g day. . . .”
(Casa had not responded to Inman’s request for comment by publication time Friday).
Rocket executives have fueled the fire, with the head of Rocket’s wholesale division characterizing Ishbia as “the playground bully” and promising to indemnify mortgage brokers who defied the “All-In” ultimatum against lawsuits by UWM.
“Whether or not it’s legal or not isn’t something that I can opine on, but it does set a really really bad precedent,” former Rocket Companies executive Bob Walters told Inman in 2021. “The ultimate losers are mortgage brokers. If you talk to any mortgage brokers, they’re furious. Some feel that they have to do something out of necessity to protect their pipelines, but they’re furious because they know, the broker knows that their super power is their choice. They don’t want to become a retail platform for UWM.”
Seeking to do more business with homebuyers, Rocket Pro TPO — the division of Rocket Mortgage that works with mortgage brokers — in the fall of 2021 launched several initiatives aimed at strengthening Rocket’s value proposition to brokers.
Ishbia ‘the playground bully’
But after relinquishing its title as the nation’s biggest mortgage lender to UWM and slipping into the red in 2022, Rocket renewed its push to grow its wholesale lending channel.
During 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 know that happens every single day. He knows small brokers don’t have the financial ability to fight UWM in court. He is the playground bully taking the smaller kids’ lunch money every single day. And you know this and brokers know this. Well, there’s a bigger kid on the playground, and it is Rocket.”
Fairway Independent Mortgage, the other “whole-tail” lender targeted by UWM, announced last month that it was closing down its wholesale mortgage department and will pivot the company’s business model “to 100 percent retail originations.”
While the rivalry between UWM and Rocket has been fierce, Rocket denies that founder Dan Gilbert holds any personal enmity toward Ishbia.
“As for the relationship between Dan and Mat, there is none,” Rocket spokesperson Emerson told ESPN. “They have never met. From Dan’s perspective, there is no rivalry.”
In an April 2 story on the rivalry between the NBA team owners, ESPN noted that Ishbia feels differently.
On a May 2023 podcast, Ishbia said Gilbert “doesn’t like me, and I don’t like him.”
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