Mortgage

UWM takes purpose at Rocket over layoffs

The latest round in the UWM-Rocket feud is playing out on social media.

United Wholesale Mortgage CEO Mat Ishbia took to LinkedIn to call out its crosstown rival, after Detroit-based Rocket Cos. announced plans earlier this week to reduce its workforce. UWM’s headquarters are located in nearby Pontiac, Michigan. 

In his LinkedIn post, Ishbia said he was “disappointed” that Rocket had made the decision to let go of approximately 2,000 employees, “as this should not be necessary for a company that made over $5 billion last year in profits,” he wrote. He also specifically cited the effects it might have on the Detroit area. 

“These 2,000+ people will struggle to find new jobs, and I think it’s disgusting that they’re thinking short term,” he said.

Ishbia’s message generated over 400 responses from employees, supporters and detractors of both companies, including Jared Fleisher, vice president, government affairs at Rocket Cos.

“Nobody asked me to write this. Mr Ishbia’s comments about ‘families in Metro Detroit’ is nothing but empty cynicism,” Fleisher replied. “There isn’t another company in Detroit or this country that can match Rocket’s record of philanthropy and community investment and service and overall commitment to its community,” he said.

Fleisher, and other Rocket staff members, also added the company was handling the reduction in “the most thoughtful and caring way possible.” Rocket hopes to slim its payroll through voluntary buyouts of 8% of employees at Rocket Mortgage and title provider Amrock. 

The social media skirmish between the Detroit-area mortgage giants shows their dispute not only centers around national market share within the mortgage industry, but also over perception and influence in their backyard, a battle that has come off as heated and personal at times. 

The disagreement escalated early last year after UWM said it would no longer purchase loans from mortgage brokers who also sold to Rocket or Fairway Independent Mortgage, an act some lawyers said violated antitrust regulations. 

Shortly after the ban was announced, Rocket signed a deal with Michigan State University to become presenting sponsor of its men’s basketball team. Ishbia is a former member of the team, who, just weeks earlier, had donated $32 million to the school’s athletic department. Meanwhile Rocket Cos. chair Dan Gilbert also counts the university as his alma mater. 

Earlier this year, UWM took legal action against a California broker it claimed had violated its prohibition by working with Rocket, further fueling the dispute. 

According to Home Mortgage Disclosure Act data, Rocket and UWM were ranked first and second respectively in the country for mortgages originated in 2020 and 2021 when measured by either volume or dollar amount.  

So far in 2022, the mortgage industry has struggled with a large slowdown in originations, driven in part by rising interest rates. Although depressed volumes were widely expected, layoff announcements have also hit several other lenders this year. In his LinkedIn post, Ishbia claimed UWM had not had a single layoff in 35 years. The company reported it had approximately 8,000 employees at the end of last year in filings with the Securities and Exchange Commission.

Neither UWM nor Rocket offered any statement regarding Ishbia’s comments or subsequent replies.

In fourth-quarter earnings calls, both companies reported originations slowing in the final months of 2021. UWM said it generated $55.2 billion in new mortgages, down from $63 billion in the third quarter. Rocket reported it had closed $75.9 billion in loans, decreasing from $88 billion three months earlier. Both companies are scheduled to announce their first-quarter earnings on May 10.

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