Mat Ishbia, CEO United Wholesale Mortgage

Today on our podcast, we’re speaking with Mat Ishbia, CEO of United Wholesale Mortgage.

Listen or read the full podcast interview below.

Tracey Velt

This is Tracey Velt, editor of publications for REAL Trends. Today on our podcast, we’re speaking with Mat Ishbia, CEO of United Wholesale Mortgage. Mat will highlight the mortgage broker channel and talk some trends in the mortgage brokerage industry. Welcome, Mat. Why don’t you tell me a little bit about United Wholesale Mortgage so those listening understand what your company does?

Mat Ishbia

We’re a mortgage company, a mortgage wholesale lender. Some people say, “What’s a wholesale lender, what is that difference?” I’m the same as every other mortgage company in America. We’re just the same as every other mortgage company where we lend people money when they’re buying a home. The difference between us and everybody else is [that] we don’t have mortgage loan officers that work for us, we only work with people that are at mortgage broker shops or banks and credit unions. Local people throughout your community who originate loans, they can shop and get you a great deal. They look at us and other mega-lenders that you probably know every one of their names, and they look for which is the right lender for each borrower situation and then we work with them. We’re the largest wholesale lender in the country for four consecutive years.

If you put all mortgages together, wholesale, retail, both combined, I think in the fourth quarter we were the third-largest only behind Wells Fargo and Quicken Loans. We do more mortgages than Chase and Bank of America and every other big company. The only difference is I don’t have to have a name brand for our company because we are just the backroom, the partner with local mortgage brokers and that’s what we really focus our business on because we really believe in that channel and we really believe that’s what’s best for consumers. We have almost 3,000 people at our company and we’re growing every single year and trying to make sure we take great care of consumers as they are looking to buy or even refinance their home.

Tracey Velt

Okay, great. I know even those in the industry get confused between a mortgage broker or mortgage banker. Tell me about the difference.

Mat Ishbia

Mortgage brokers are completely independent. They are not captive or connected to my company or any company. They are independently shopping. The way I always try to explain the difference between a broker and a banker, and both are good, everyone works well depending on their situation. We really believe that the best place for a borrower to get a loan, that’s at an independent mortgage broker.

That’s because the broker has access to multiple lenders instead of just one lender. If you are a banker, you have access to just your lender. Just like any lender, I’m really good at conventional loans, I’m not too good at 203K loans. If you are a banker that works for me, which we don’t do that at our company, but if you were, you wouldn’t be able to offer great rates or great products on 203K, but if you’re a broker that works with me and you’re conventional there’s other great lenders you can work with on a 203K, therefore you have the best of both worlds. You have great wholesale pricing, along with access to more products and that’s why we really believe that the broker channel is growing right now and is best for consumers, and it’s best for loan officers because they have access to all these lenders. We’ve seen a lot of success with that.

The broker versus banker, we’re all originators out there trying to help consumers, which is great. We believe that options are better, more options are better than less and that’s why we believe in the broker channel and that’s why we’ve invested all of our time and effort in trying to help the broker channel grow and thrive because it’s best for consumers and best for our loans and that’s where we’ve been aligned for the last couple of years.

Tracey Velt

Tell me a little bit about the mortgage broker channel. Tell me about that and some of the benefits to brokers should they partner with you or with a mortgage broker.

Mat Ishbia

Well for a consumer to partner with a mortgage broker, the really big benefit is you’re going to be able to get options. You’re going to be able to say, “Okay.” Because if you go to, just using a name, Wells Fargo, they’re the biggest mortgage company in the country. You go to Wells Fargo directly, Wells Fargo offers a great products, great things, but only what Wells Fargo wants to offer. If you went to an independent Broker, they can offer, for instance, Wells Fargo’s products or Flagstar’s products or our products at UWM or Caliber or Quicken, you’d have access to five lenders. Then they say, “Based on your situation, this is what’s best for you and your family,” and they can place you with the lender.

Some people think, “Well if you go through a middle man you’re going to get charged more.” It’s actually the reverse in mortgages where, if you actually went through a broker you’re going to get the cheaper deal even after the broker is paid by the lender, you still get an all-in better deal than if you would have went directly to the lender. We really see a huge opportunity there. People don’t realize that and it’s really an educational thing for consumers to understand that. Broker channels used to be a bigger percentage of the market and now it went down to almost 7%, and now it’s back up to 15, 16, 17% and we see that doubling in the next couple of years because more and more consumers realize that with technology I want to make sure I can shop and get a great deal for me and my family. At the same time, more loan officers that originate are saying, “Gosh, I can offer my consumers better deals if I was at a mortgage broker shop and I can serve my realtors better if I was at a mortgage broker shop.” The combination of those things is making the mortgage broker channel really grow and grow fast.

Tracey Velt

Obviously, the market is predicted to slow in the next year and that will impact your industry. What are some of the opportunities that you see and what are some of the impacts that you see as well?

Mat Ishbia

Well, the market, everyone talks about rates going up and obviously rates have gone up recently and they’ll continue to go up in our opinion. However, we still think there’s a huge opportunity. People are buying homes. This industry is so big, it’s $1.5 trillion. There’s people buying homes every year and in a slow year it goes down a little bit, right. It’s not like there’s not going to be people buying houses. There’s great real estate agents out in the country, there’s great mortgage people, and there’s a lot of borrowers, a lot of consumers that are buying homes or even refinancing. The refinances will definitely slow down as rates go up, which would make sense, but there’s still opportunity. I actually look at 2019 as a fantastic opportunity to really grow because it’s not as easy where it’s just everyone’s calling you and saying, “Let’s refinance,” or, “Hey, it’s growing so,” but the opportunity is for those that really want to be involved with the mortgage industry to really grow and thrive in 2019.

We expect our company, we’ve grown over the last couple of years, even in a declining market, we expect our business to grow significantly in 2019. That’s just by partnering with great brokers and helping brokers connect with realtors and consumers throughout country to really help them grow their business. We help our partners grow and we’ll grow as well and that’s really what we’re focused on. I think this year is going to be a really great year in the mortgage industry, actually.

Tracey Velt

Okay. Let’s talk a little bit about how you’re working with real estate brokerage firms right now. Do you have specific programs with them that you can explain at all?

Mat Ishbia

Once again, we’re really be behind the scenes. What we do with real estate agents and real estate broker firms is really help connect them through local mortgage brokers and really show them who the people are because real estate agents want to do a couple things. One, they want to make sure their consumer, their home buyers are well taken care of and given great service. Mortgage brokers really do a fantastic job. Second, is they want to make sure when we say we’re going to close on January 29th, it closes on January 29th, and the money is there and everyone can have a success. Those are the keys to real estate agents and we have some things that we’ve helped our Brokers do to make sure those are always success stories, so that real estate agents can deliver great service to their consumers along with hopefully refer more of them to Mortgage brokers.

That’s a real focus of ours and has been for years and, it’s really, like I said, “It’s really taken off in the last two years,” really because more and more real estate agents are realizing the benefits and saying, “Gosh, I want to take good care of my consumer,” because that’s what real estate agents think about. They do that by referring them to a broker, everyone’s winning and that’s really what’s happening lately.

Tracey Velt

Okay. Tell me some of the challenges that you see coming down the road and what are some of the challenges, or some of the misconceptions that you find people have about wholesale mortgage?

Mat Ishbia

Well, yes, the misconceptions about wholesale mortgage or even the word broker, right. Some of these words and people have talked negatively about it. A lot of times, 2008, the whole crash happened and everyone blamed Brokers or blamed mortgage people. There were some people that obviously did things inappropriately, which hopefully those people aren’t in our industry anymore, however, it was a little bit more of a mainstream media push because when you only interview the CEOs of those largest lenders in the country, they’re not going to say that, “Oh, that was our fault, we messed it up.” They pointed their fingers and blamed brokers or blamed real estate agents and blamed everyone that was not named their company. We saw that happen in 2008 and the people that got hurt were the consumers in that respect. When the CFPB got formed and originally Richard Cordray was the leader of it and I thought he did a very good job of a lot of things there because what he focused on was what’s best for the consumer.

If everyone in the industry, our industry, the mortgage world and real estate world, focused on their client first, the consumer and do right by them, you’ll end up ahead. What we did is we looked around and said, “Wow, brokers are best for consumers, and we’re going to spend all of our time helping brokers succeed because they can give the consumer a better deal and they can help consumers get in a house because they have access to multiple lenders and multiple products,” so we really focused on that. We think that the wholesale channel and the broker channel will grow. I think although some people gave it a bad name because of some things that happened in 2007 and ‘08, we think of it as a lot of misplaced focused on from a perspective of blaming other people when it really wasn’t them. The large lenders, the Chases, the large lenders, Quickens, all these guys were very happy to point and say, “It wasn’t us, it was brokers,” but the reality is that’s not what happened and people see that now and brokers are starting to thrive again.

Tracey Velt

Okay. Let’s talk trends. Obviously blockchain technology is, many companies are striving to make the title specifically, but the mortgage industry as well, more transparent and streamlined. What are some of the trends you’re seeing in your industry in the next 12 months?

Mat Ishbia

Yeah, so technology. Obviously, you hit on blockchain a little bit and how does that fit into this world, right? A way we think about this is, there’s only going to be more and more technology. There’s only going to be more and more digitalization of all industries so, how do you use technology to enable humans? It’s not replacing humans, it’s enabling them to become more efficient. We see a huge shift in our industry about using technology. We’re obviously working with very secure financial data, so doing that in a secure comfortable way for people and making sure you’re always protecting their data while delivering them a better experience than they used to get is really the key. The trend in the next six to 12 months in my opinion is going to be continuous focus on automation and integration and a digital world but, some people have gone off course in my opinion, where they’re focused on trying to replace humans, we’re focused on trying to enable humans, how to help everyone become more efficient. If you used to be an originator and could do five loans a month, excuse me, with the technology, you can now do seven because we’ve taken some things offer your plate with technology. You don’t have to chase down the W-2s because we can pull that in from the IRS or whatever it may have been.

Using technology to really enhance and enable humans and make the client experience better is really the trend. Everyone talks about digitalization and all this stuff, the key is, it’s not about the fancy new word or fancy new thing out there, it’s all about what actually executes and works and helps people become more efficient. Does it make it so that borrowers want to work with you. Does it make it so that you can do more loans or more transactions? That’s what the question is, not just, oh that’s this, “Oh, Alexa can you check my …” that’s not maybe some of the stuff. It’s stuff that actually makes an impact and we’re seeing some of it right now. We’ve rolled out some things and we have some big things rolling out of our company later on this year too that are really tied to some of those things.

Tracey Velt

Share with me just maybe one of the recent things that you rolled out to help?

Mat Ishbia

Here’s a good example, and I don’t know how in the weeds you want to get on it but, when you originate loans or mortgages, you have to run the automated system from Fannie Mae and Freddie Mac. Basically, one’s called DU and one’s called LPA. Most people just run which ever one they feel best about. I love running DU. The borrower, the Ishbia family comes through, we run them through DU, they get approved, and we send it to a lender. Well what we did is we created a technology and basically you can click one button and run both of them at the exact same time, so you get both approvals. You’ll say, “Well why do I want both approvals?” One approval requires an appraisal, one doesn’t. Well now, all of a sudden I just saved my borrower $500 and also I cut four or five days off the process to close this loan because I don’t need an appraisal because the Fannie Mae system says, “This borrower’s house is worth $300,000, you’re saying it’s worth $280,000, so therefore we’re very comfortable with lending this borrower $200,000 and whatever the example would be with 20% down, lending them the money without an appraisal.” With the technology we’ve built, we created efficiencies where our customers, our mortgage brokers can click one button run both, and then deliver a better deal to the consumer.

We save consumers millions of dollars of appraisal fees, let alone how much time, five, six days on many loans, which saves on lock fees. Once again, it’s enabling the loan officer to be more competitive and to be more efficient and to be able to offer better deals to consumers by the technology. It wasn’t replacing loan officers or replacing processors, it was making them better. That was one example we rolled out in the fourth quarter last year, we’ve got a couple more things like that coming in 2019.

Tracey Velt

Okay great. Is there anything that we didn’t talk about that you think is important for real estate professionals and brokers to know about your company or the industry?

Mat Ishbia

I think we’ve covered most things. I think the key thing that place have to realize is that we all have to serve clients. Who is our client? It’s the consumer. It’s the person buying the home. We all live in this world, in this industry every single day so we do a lot of transactions, but this is a big deal for people. We have that honor of helping people and helping them make a difference. Obviously, we get to make a difference by helping them get their home or position refinance, and I think it’s a big deal or it’s a big honor that we get to do that, so just making sure we take it very seriously and at the same time, making sure we’re constantly challenging on how to do a better job for our customers. If we always are trying to make things better for our clients, like I talked about with the technology I just spoke about, or just being able to shop for them to get them a better deal, or find a great partner for them, those things make a difference. Every single person you affect, it helps them. I love this industry. I think it’s a great opportunity for all of us and I’m excited to hopefully have a great year doing it this year and do it again next year as well.

Tracey Velt

Well great. Well Mat, thank you so much for joining the REAL Trends podcast. We sure do appreciate you taking the time to speak with our listeners.

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After earning her bachelor’s degree in journalism at the University of Central Florida, Tracey set out in the real world at Florida Realtors in 1994 as a communication assistant, working her way up to editor in chief of Florida Realtor magazine. In 2004, she left the association to start her freelance writing and editing business. One of her first clients was REAL Trends, and she started working for the organization in 2005. In 2014, Tracey was promoted to editor in chief of publications for REAL Trends. She handles the writing and editing of all REAL Trends publications and marketing materials, including LORE Magazine, the REAL Trends newsletter and the blog. She is also the primary podcast interviewer where she conducts interviews with top real estate industry leaders and affiliated industry leaders. Tracey is married with two children.

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