UWM CEO Mat Ishbia bashes Rocket Mortgage over buyouts
Mat Ishbia, the CEO of United Wholesale Mortgage Holdings Corp., has reignited the Pontiac-based mortgage giant's feud with crosstown rival Rocket Mortgage, slamming the country's No. 1 mortgage lender for taking workforce reduction actions that he called "disgusting."
Detroit-based Rocket Companies Inc. this week said it was offering voluntary buyouts to 8% of its employees at Rocket Mortgage and title insurer Amrock. In doing so, it joined a chorus of lenders across the country in announcing efforts to reduce their workforces as interest rates increase and inventory remains tight, reducing demand for refinances and other mortgages. It wasn't clear as to how many people Rocket Companies, which also includes businesses like Rocket Homes and Rocket Auto, made its offer, but it employs in total 26,000 people, mostly in Detroit.
"Disappointed is the nicest way to describe my thoughts around Rocket Mortgage/Quicken Loans laying off over 2,000 of their people, as this should not be necessary for a company that made over $5 Billion last year in profits," Ishbia wrote in a post on LinkedIn. "Even though United Wholesale Mortgage directly competes with Rocket, I hate seeing this type of negative impact on families in Metro Detroit. These 2,000+ people will struggle to find new jobs, and I think it’s disgusting that they’re thinking short term and are solely focused on cutting a few million per month in costs… this is the wrong thing to do to people."
He added that UWM, which nearly doubled its workforce since the COVID-19 pandemic began to more than 8,000 employees, "will never have a layoff because we are a family company focused on what’s best for our people."
Although Rocket is seeking to trim its workforce, the offers are voluntary. A spokesman for the company declined to comment on Ishbia's post, though Jared Fleisher, Rocket's vice president of government affairs, left a response on LinkedIn.
"Nobody asked me to write this," Fleisher wrote. "Mr Ishbia’s comments about 'families in Metro Detroit' is nothing but empty cynicism. 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. You sir have no such record to speak of. Rocket is responding to dramatically changed market conditions in the most thoughtful and caring way possible. The fact that you seek to exploit it for your own ends is evidence of nothing but the true depth of your cynicism, lack of caring and immorality."
A UWM spokeswoman declined to comment. Rocket and founder Dan Gilbert are heavyweights in Detroit's philanthropic arena and have committed $500 million to the city's neighborhoods. Ishbia, a former Michigan State University basketball player, has made the largest donation to the university's athletics program, and UWM last year opened a community sports center in Pontiac.
The two companies for years have feuded, resulting in lawsuits and last year Ishbia declaring UWM no longer would do business with mortgage brokers who continue to work with Rocket, which has led to lawsuits, The Detroit News reported in February.
Rocket said earlier this week its buyouts include several months of pay; full medical, dental and vision coverage until November; payment for banked personal time off; early vesting of stock that employees received at the company’s initial public offering, as well as career coaching, resume building and job search assistance.
UWM itself has cheered on departures of loan officers on the retail side of the business to become mortgage brokers. UWM isn't a retail lender that works directly with homebuyers and owners. It exclusively originates mortgages through brokers, who help homeowners find the best loan for them, and is the country's top lender in the segment. It's aiming to surpass Rocket as the No. 1 lender in the country by volume by 2024 with the expectation that 33% of loan volume will originate through brokers by 2025, up from 20%.
Rocket originates mortgages through both channels and is particularly strong in refinances. Although it closed record loan volume in 2021, its net income of more than $6 billion was down 35% year-over-year. Both Rocket and UWM are scheduled to report first-quarter earnings on May 10.
Rocket isn't the only lender trimming its workforce. To offset decreasing revenue, Troy-based Flagstar Bancorp Inc., which this week said it was extending its stalled agreement to be bought by New York Community Bancorp Inc., has laid off 20% of its mortgage staff — 358 employees in two waves at the end of March and in April.
Ann Arbor's Home Point Capital Inc. last year also laid off 10% of its workforce. Wells Fargo & Co. also has laid off staff members, according to reports, along with Better Mortgage's Better Holdco Inc. and other lenders.