He says the real problem started well before the $10,000 offer made headlines
After simmering beneath the surface for a while, the Rocket versus United Wholesale Mortgage conflict returned to the headlines last week after Rocket Pro’s RPX event.
Despite making several announcements, it was the $10,000 incentive to get brokers to leave UWM that drew the most industry reaction. The company took direct aim at UWM’s broker ultimatum, which leaves those who broker with UWM unable to broker loans to Rocket.
Reaction around the industry was widespread. One veteran broker told Mortgage Professional America he thought the attempt to woo UWM brokers was ‘insidious.’
However, others in the industry were hopeful that a pushback by Rocket against the UWM ultimatum might bring an end to the ultimatum, providing a truly open wholesale market.
Brendan McKay (pictured top), chief advocacy officer for the Broker Action Coalition and owner of McKay Mortgage, said the negative reaction to Rocket's move is missing something more important.
"I think that what this really is, is a symptom of the ultimatum," McKay told Mortgage Professional America. "That is the root problem here. UWM, through the ultimatum, has created an uneven playing field."
Dividing the broker community
McKay said he understands the criticism Rocket has faced for the incentive, but does not agree with it.
"Criticizing Rocket in this situation to me is akin to criticizing a kid on how they fight back against a bully," he said. "I recognize this analogy paints Rocket as a kid getting picked on, which they're a big, massive conglomeration, but in the wholesale market, UWM is the big dog in the space. Rather than giving the kid a hard time for paying all their friends $10 to stand up for them, I'm more interested in addressing the behavior of the bully and correcting that."
He said his frustration is less with any single announcement than with the broader effect the ultimatum has had on brokers themselves.
"It has drawn a black and white line through the broker community that's frankly tragic," he said. "I think it really, really sucks. UWM is the one that is making the decision that is leading to this, and I think they should take accountability for it."
That dividing line in the community means many brokers are labeled one side or the other, when there are hundreds of wholesale lenders brokers can work with besides those two. McKay said the bottom line is a broker’s loyalty to their brokerage and the customers they serve.
"I'm so sick of, ‘Are you a Rocket broker or a UWM broker?’" he said. "I hate it. My corporate brand loyalty starts and ends at McKay Mortgage. I don't have any loyalty to any corporation. I am loyal to people, but people within a corporation can change."
Hope for the future
The current rate environment, McKay said, raises the stakes on any move that narrows a broker's options, especially between two strong lending partners like Rocket and UWM.
"I'm of the opinion that price always matters," he said. "Rocket is the best-priced lender in the market at the moment. Brokers that are unable to work with Rocket because of the decisions that UWM made are at a disadvantage right now compared to brokers that are working with Rocket. Now, I want to be clear, both lenders are fantastic. We're always worse off for only being able to work with one and not the other."
McKay said that he believes if the ultimatum ended, Rocket’s new promotion would end shortly after.
"I hope the ultimatum ends, and 24 hours later, this promotion will likely go away as well," he said. "It's a response to a fight that they didn't start."
Despite the challenges of both the Rocket/UWM situation and the overall market conditions, McKay’s outlook remains positive. He hopes both situations will improve, sooner rather than later.
"You're speaking to an undying optimist at all times," he said. "I think sometimes things have to get worse before they get better. There has been an undercurrent within the broker community for some time now that is pretty sick and tired of the divisiveness. I do think we're moving in the right direction."
As his brokerage gets ready to celebrate a major milestone, McKay said it’s important to remember that the wholesale market is a vast space. He encourages brokers to expand their options to help customers get the best deals in a tough market.
"Next year will be 10 years for McKay Mortgage. UWM has been our number one lender one year. One," he said. "It has been a different lender every single year otherwise. That's not to be critical of brokers that send a lot of their business to one lender or the other. I would like them to send it more, but I'm not someone who acts like that's never happened before, that never in the history of mortgage brokers has a broker sent more than 80% of their business to one lender."
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