Ishbia clarified that brokers have until March 15 to make that decision.
Ishbia specifically accused Rocket of trying to cut credit agents and pay real estate agents to bring clients to the Detroit-based lender.
Rocket executives, for their part, deny such allegations and say Ishbia’s action on Thursday was made because it felt threatened by Rocket’s growing presence on the brokerage channel. The latter company says it now has about 10,000 brokers it works with, compared to 3,000 three years ago, according to Austin Niemiec, executive vice president of Rocket’s wholesale broker platform, called Rocket Pro TPO.
“The reason we did this is because we are giving value to brokers,” Niemiec told Crain’s in an interview. “Not by threatening them. Not by giving them ultimatums. Not by telling them what to do. We are providing value. Incredible interest rates, an incredible technology platform.”
Niemiec equated Ishbia’s request with brokers to make a choice for someone going to FedEx and the logistics company saying that they would not ship the package because the customer also uses UPS.
In an interview with Crain’s on Thursday night, Ishbia emphasized that he is not accusing any of the companies of any illegal activity, adding that he is neither a “judge (or) jury” when it comes to violations of the Property Liquidation Procedures Act. . Federal law aims to prohibit kickbacks and other abusive practices in the real estate sector.
But Ishbia argued that both companies were involved in “covert” behavior, which he said led to his announcement.
“Fairway and Rocket are doing things covertly to undermine the vitality of the mortgage channel,” said Ishbia, adding that he believes the wholesale market is the best and cheapest option for consumers. “What (Rocket and Fairway) are trying to do is cut mortgage brokers by doing what I think are underhanded things.”
The head of UWM also noted that, of the response he has received from brokers so far who have worked with the three companies, more than 90% said they intend to stay only with the Ishbia company.