PERSON OF THE WEEK: Mat Ishbia is president of United Wholesale Mortgage (UWM) and CEO of United Shore Financial Services (USFS). A veteran of the mortgage industry, Ishbia was named one of the Most Influential Mortgage Professionals under 40 by the National Mortgage Professionals. In addition, he was named to Crain's Detroit Business' 40 Under 40.
MortgageOrb interviewed Ishbia to get his views on the impact new regulations are having on the industry and the other challenges facing today's mortgage brokers.
Q: How would you categorize the state of today's wholesale lending market?
Mat Ishbia: The wholesale market is constantly changing and evolving. Right now there are a lot of companies trying to join the space and get in on the potential growth of the wholesale market. In years past, some large players exited the wholesale channel, but now the market is shifting and more and more companies are pursuing the wholesale business and trying to find their niche. I think there are opportunities for wholesale lenders that understand the importance of treating brokers correctly and helping them grow.
Q: What impact (either positive or negative) did the new wave of federal regulatory changes and Basel III have on the wholesale sector?
Ishbia: I view the new regulatory changes in our industry as a positive, for the most part. What has happened is the government has made a lot of changes that are looking out for the borrowers and, in turn, raised the barrier to entry for competition. Brokers and lenders alike that have successfully navigated through this new, constantly changing compliance world are stronger because of it and are well-positioned to succeed in the long term.
I believe that the only constant is change, so we should embrace it, educate ourselves on it, and use it to our advantage. So, when the next rule change comes out, just know that if you educate yourself on it and take the proper action, then you will be very successful in our industry, and others may fall behind. Complaining or worrying about these changes will only take away from your daily business and will hurt you in the long run. Embrace the changes, know that they will always be coming, and use them to your advantage by being ready for them and understanding them.
Q: What do you see as the challenges facing today's mortgage brokers?
Ishbia: The main challenge facing brokers today is finding the right lender to partner with. Brokers need a lender that will help them grow their business. If a broker focuses on growing their business by gaining more referrals and exciting real estate agents to work with them, then they will be successful in 2013 and beyond.
It is easy to get caught in the trap of only worrying about the one loan they have in their pipeline rather than how to use that one loan to get more business. Finding a lender that can "make the broker look good" is such a key to success and is a real challenge in the industry. We have held town hall meetings and in depth discussions with brokers of all sizes, and they all convey that this is a pain point they need addressed.
We have focused our business at UWM on this exact issue. How can we help grow our brokers' business? What can we do to make it so they look good and succeed because of our operations team, our technology and our service? If we can do that, we will get more business at UWM, while our brokers are succeeding.
Q: Secondary market options are still relatively limited – how does this impact wholesale lenders?
Ishbia: Secondary market options are limited from the days past, but I believe there are still many viable options out there for wholesale lenders. Smaller lenders will struggle without the ability to sell direct to Fannie Mae, Freddie Mac and Ginnie Mae and if they do have that ability, the cash implications of not selling the MSRs puts a strain on these lenders.
Partnering with lenders that do sell direct to the agencies is critical, as you will get a purer underwrite and more transparency throughout the process. Also, it is important to note that there are a lot of Wall Street firms that are looking to bring private capital back to the mortgage market, which will lead to more options for lenders and brokers as well.