CEO Outlines Nightmare Scenario For Borrowers, Lenders

MBS Highway President and CEO Barry Habib presented a bleak scenario resulting from the Federal Housing Finance Agency’s announcement Tuesday that mortgage lenders will have to cover four months of missed payments from borrowers under forbearance during the coronavirus pandemic. In a Facebook Live with the Association of Independent Mortgage Experts, Habib warned that lenders may be incentivized to hold on to new loans and potentially ruin borrowers’ credit, unless more federal protection is enacted. He presented a scenario in which a servicer issues a loan and makes 50 basis points on the deal. “If a loan went bad on a first-payment default because they needed forbearance or they’re gaming the system … so on a $300,000 loan, you risk losing $21,000 to…

IMB Profits Grew 300% In 2019

By Jim Perskie The lending business was significantly more profitable for independent mortgage banks (IMBs) in 2019. IMBs and mortgage subsidiaries of chartered banks made an average profit of $1,470 on each loan they originated last year – up from $367 in 2018, according to a report released Friday by Mortgage Bankers Association. The report also found: Average production volume was $2.7 billion (10,411 loans) per company in 2019, up from $2 billion (8,171 loans) per company in 2018.On a repeater company basis, average production volume was $2.94 billion (11,227 loans) in 2019, up from $2.14 billion (8,805 loans) in 2018. For the mortgage industry as whole, MBA estimates production volume at $2.17 trillion in 2019, up from $1.68 trillion in 2018.The…

UWM Vows No Layoffs, But There Will Be Dancing, Yoga, Zumba

As customers complain about lack of flexibility with their mortgages and unresponsive customer service, United Wholesale Mortgage vowed Thursday that there would be no layoffs at the company amid the coronavirus pandemic. UWM made the announcement in an unusual press release: PONTIAC, Mich., April 9, 2020 /PRNewswire/ — Today Mat Ishbia, president and CEO of United Wholesale Mortgage (UWM), the #1 wholesale mortgage lender, spoke to the 5,800 team members in an emotional all company address reminding them they are family, he is here for them and their jobs are safe during these very uncertain times. “Our neighbors, family and friends are getting sick and losing their jobs at a staggering rate while facing incredible stress about their finances in the middle of this global…

Redfin Furloughs Agents, Cuts Salaries

Redfin announced that 41 percent of its agents are leaving the company, with some leaving the company for good and most furloughed through the summer. The company also it is cancelling bonuses and temporarily cutting headquarter salary by 10 to 15 percent. “We decided on this large-scale furlough because fewer people are buying and selling homes, but another factor was the federal government’s $600 weekly contribution to each person’s unemployment insurance,” CEO Glenn Kelman said. “Of the field folks leaving, we estimate about 75 percent live in states that will allow them to earn more from unemployment insurance than from Redfin.” Kelman said employees who build the technology and programs behind the brokerage are staying on, with “a small number…

Free Press Silent About UWM Leadership Coach’s Past

The Detroit Free Press wrote a glowing article last week about United Wholesale Mortgage CEO Mat Ishbia and his hiring of former Michigan State basketball teammates: Twenty years ago, Ishbia was a walk-on third-string point guard for the Spartans, the human victory cigar on a team that won the 2000 NCAA tournament. Now, he’s the CEO and president of United Shore, a company that has grown from 12 employees to 5,800 in just 17 years. Ishbia has hired five former MSU teammates to work with him, in part because they are his friends — he gets them in the door; it’s up to them to do something with it. But also because they speak the same language and share the same experiences. Those teammates are Adam…

Troubled WVa Bank First To Fail In Coronavirus Era

The Federal Deposit Insurance Corporation announced the first failure of a bank during the coronavirus pandemic, though the bank was struggling before economic challenges began. The West Virginia Division of Financial Institutions closed The First State Bank in Barboursville, West Virginia on Friday. MVB Bank of Fairmount acquired all of the bank’s deposit accounts. FDIC said The First State Bank had approximately $152.4 million in total assets and $139.5 million in total deposits as of Dec. 31. In addition to assuming all of the deposits, MVB Bank agreed to purchase approximately $147.2 million of The First State Bank’s assets. The FDIC will retain the remaining assets for now. Earlier this year, DepositAccounts.com had given the bank an “F” for its financial…

UWM Customers Struggle With Relief; Company Adds 2nd Income Verification

United Wholesale Mortgage announced that it is conducting a second verification of income and employment step late in the loan process in the face of rising unemployment amid the coronavirus pandemic. At the same time, existing customers are getting increasingly frustrated with the company and vocal on social media with the company’s lack of responsiveness as they seek to adjust their mortgages during economic hardship. “With everything going on right now, it’s just really imperative that we’re verifying that income and employment have not changed the day we’re sending them the money,” said Eric Mojica, UWM’s vice president of sales. Mojica said UWM does two verification of employment checks now, one earlier in the process and one just before closing to…

UWM Appears To Avoid FHA Loans, Refinancing Opportunities

United Wholesale Mortgage President and CEO Matt Ishbia said his company is purposely avoiding mortgages that serve lower and some middle-income Americans. “We are always on the higher credit score buckets at UWM and the lower rates at UWM. … We want lower rates, best quality borrowers, close them fast, get them to give you three referrals, and let’s keep dominating,” Ishbia said in an interview last week with the Association of Independent Mortgage Experts (AIME). Ishbia made the comments from his office at a time when brokers are working to adjust the way they do business amid the COVID-19 pandemic. Some of the brokers with whom UWM does business have complained on social media and elsewhere that UWM is…

iBuyer Fallout: Zillow Pauses Home Buying

Zillow announced Monday that it is suspending buying homes as part of its iBuyer program across the country amid orders to end all non-essential businesses. The company will continue to market and sell homes through Zillow Offers, but will pause making offers to sellers to “protect the safety and health of its employees, customers and partners.” “Our top priority is ensuring the safety and health of our employees, customers, and partners. Given the concerns for public safety and rapid developments by governments that restrict local real estate activities, we determined it was prudent to pause our home buying to preserve our capital,” Zillow Group CEO Rich Barton said. “We plan to restore Zillow Offers full operations once health concerns pass…

Mortgage Lender CEO Says “Everyone’s Winning Right Now” Amid Pandemic

On the same day the government announced 281,000 Americans filed jobless claims last week amid the coronavirus pandemic, United Wholesale Mortgage President and Chief Executive Officer Mat Ishbia declared “Everyone’s winning right now” in the mortgage market. Ishbia, in an interview with Association of Independent Mortgage Experts (AIME), lashed out at critics Thursday for spreading “crazy rumors, crazy things” about his business, saying “things here at UWM have never been better.” “I’m sure my competitors and other people in the industry, retail people, would love for UWM to not be strong and love for something to be behind the veil besides that UWM is going to be here for the long term helping brokers dominate,” Ishbia said. See also: Ishbia says UWM avoids…