By KIMBERLEY HAAS
The executive vice president of Rocket Pro TPO told brokers across the country on Monday that they are willing to indemnify those who choose to fight United Wholesale Mortgage’s anti-competition ultimatum.
During a live-streamed Ignite Live event, Mike Fawaz said he believes the ultimatum was one of the worst things to happen to independent mortgage brokers in 50 years.
“The ultimatum uses lawyers and contracts to limit choice – both for the broker and for the clients the broker services,” Fawaz said. “There’s no other way to put it – the ultimatum is immoral, reduces broker incomes, and increases the rates the clients of brokers will pay.”
Fawaz said that they stand behind brokers who want to use Rocket or Fairway Independent Mortgage. They plan to cover penalties and court costs for those professionals.
Fawaz compared UWM’s CEO Mat Ishbia to a bully in the broker community.
“He uses his power to intimidate and coerce those with less power. He knows small brokers don’t have the financial ability to fight UWM in court and he counts on that fact. He is the playground bully taking the smaller kid’s lunch money. Well – there is a bigger kid in the playground. Rocket is that bigger kid,” Fawaz said.
This is not the first time Fawaz has spoken out publicly against UWM.
Last month, he took to social media to question Ishbia’s actions.
Fawaz said at the time that prior to being named executive vice president he spent two years meeting with brokers who are partnered with Rocket Pro TPO – and those who are not – to learn what they deal with on a daily basis.
On Tuesday, Fawaz told The Mortgage Note that these conversations with brokers are what led to “Bully Shield.”
“It’s absolutely because of those conversations,” Fawaz said. “One of the most common things I heard from brokers was their opinion on the ultimatum… They knew the ultimatum was hurting their business.”
Fawaz said the ultimatum is immoral because it holds the broker community back from growing. Freedom is essential to a strong marketplace for brokers, he said.
The ultimatum has been challenged in court but UWM has had success in dismissing claims of fraud and promissory estoppel.
Fawaz said the reaction to “Bully Shield” has been immediate.
“I walked off stage and I’ve had hundreds of messages,” Fawaz said. “I’ve heard a lot of support from the broker community.”
When asked what the limitations of the program are, Fawaz said he wants to keep it as simple as they can.
“If you want to get out of that immoral ultimatum, we’re the partner for you. We will support you,” Fawaz said. “If there’s any court fees based on the ultimatum, we will have your back. We will protect you. And we will be there for you when you need us.”
Fawaz said anyone who might benefit from their help is welcome to call Rocket Pro TPO for guidance.
The “Broker Wars” started in 2021 when Ishbia announced that his company would no longer work with professionals who conducted business with Rocket or Fairway.
“I can’t stop you, but I’m not going to help you, help the people that are hurting the broker channel. We don’t need to fund Fairway Independent or Rocket Mortgage to try to put brokers out of business,” Ishbia said during a Facebook Live at the time.
UWM’s announcement came a little more than a month after Rocket announced a national broker directory on its website that allowed homebuyers and homeowners seeking to refinance to find local independent mortgage brokers to guide them through the process.
Ishbia posted on LinkedIn recently that more than 20,000 loan officers joined the wholesale channel last year.
“I hear so many positive stories and feedback from our partners that made the choice to become independent, and I am excited for even more LOs to join the broker family in 2023,” Ishbia wrote.
Fawaz said on Tuesday that since their Fee Freedom program launched on Jan. 9 – which covers the cost of credit report fees for brokers – hundreds of professionals have either started to work with Rocket or have reinstated their relationship with the company.
Editor’s Note: By Friday, hundreds of brokers had reached out to Rocket Pro TPO to become a partner, according to their public relations department.
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— The Mortgage Note (@TheMortgageNote) February 6, 2023
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