What brokers need to know about UWM’s new move
In a year of mortgage acquisitions, especially in the wholesale channel, United Wholesale Mortgage (UWM) may have fired the final salvo of 2025.
The Michigan-based company announced it was acquiring Two Harbors Investment Corp. in an all-stock transaction valued at $1.3 billion. Included in that acquisition was the subsidiary RoundPoint Mortgage Servicing, one of the largest servicers of wholesale mortgages.
It was another piece in the puzzle for UWM, which announced it was bringing servicing in-house following Rocket’s acquisition of Mr. Cooper earlier this year.
Bruce Gehrke (pictured top), senior director of wealth and lending intelligence at JD Power, said it’s a move to help mortgage brokers stay in contact with former customers, even after the loan has closed and moved into servicing.
“I think it is a really big move,” Gehrke told Mortgage Professional America. “Setting up a servicing operation is not a simple task. It's a specialized business. It's a business of scale, economies of scale. (RoundPoint) has a good-sized service portfolio, but you know, it is smaller than a lot of other players out there. Taking that on indicates a significant step strategically.
“Because why else would they want to do that? You watch them talk about this, and it's like they're looking to make these possibilities available for their customer base, the mortgage broker. The brokers out there can still stay in touch with the borrower. I think it's really a strategic beachhead to be able to compete head-to-head with the Rockets of the world.”
Getting ahead of trigger lead ban
Gehrke thinks this move made sense for UWM because it allows them to bring a large servicer under its umbrella rather than building out servicing completely from scratch.
“If you're committed to start servicing, it's that old question of build or buy,” Gehrke said. “The fastest way to do it is to buy it so they don't even have to mess around with the branding. It's always going to be branded differently from the broker.”
In addition to gaining know-how in this acquisition, they’re also gaining servicing rights on existing loans in the RoundPoint portfolio. This is critical in a post-trigger-leads world. After trigger leads are banned, two of the entities that will still be able to use trigger leads are the originator and the servicer.
“What they want access to is the data and that ongoing relationship with the person,” he said. “Then they can parse it back out to the originating brokers, assuming they're still active clients of United Wholesale. When trigger leads go away, I think big users of trigger leads are brokers. But now, UWM is in a position to manage those trigger leads. They can direct them back. So once the broker loses access to that, UWM has access to it.”
By continuing to build the company and adding servicing to its platform, UWM is creating something that looks more like a retail loan provider, but using independent mortgage brokers rather than retail loan originators.
“Another enhancement, and this seems to be a big part of their strategy that frankly I think is pretty smart, is they're creating this company,” Gehrke said. “They're treating the brokers very much like their own retail origination team, except they're independent performers. But they're giving those brokers every advantage that a big platform lender would give their internal loan officers. What they're trying to do is level that field and include the mortgage broker in there.”
Controlling the local community
Of course, not every broker works with UWM or Rocket Pro. Some have small brokerages that work with other wholesale lenders. As those two companies continue to grow, Gehrke said smaller brokers must leverage their local connections to keep building their businesses.
“You need a good understanding of how you're going to differentiate and compete,” he said. “That doesn't mean you can't compete against them, but you need to know how you're going to do that. I think brokers still have a tremendous opportunity locally, and I think the advantage to succeeding locally outweighs, at this point, the efficiency of what's coming from the big platforms. But who's to say how long that lasts?”
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Gehrke encourages local brokers to become true experts in their field and to understand their customers' long-term journey. This allows those brokers to reach out to customers much earlier than the large providers do.
“That local presence that brokers tend to have, and their competitive advantage, is what I think they really have to double down on,” he said. “They've got to control that local community and that environment. They need to be experts in financing, and they need a longer-term vision.
“This kind of move from such a big wholesale player like UWM gives them the ability to have a longer view on the customer. There are a lot of different business models, but it's really interesting to see how, from a competitive standpoint, all this will shake out.”
JD Power recently released a study of digital mortgage servicing mobile apps, which were dominated by traditional banking apps. Rocket Mortgage and Mr. Cooper were included in their rankings.
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