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Mortgage Billionaire Builds Team To Take On The Champ

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Ishbia brazenly pits United Wholesale against rival Rocket for pinnacle of the white-hot home-financing market.

Mat Ishbia was a glue guy and a scrapper as a third-string point guard on a national championship men’s basketball team at Michigan State University in 2000. Now he’s leading some of his former teammates – and about 7,000 other employees – to a new kind of glory as president and CEO of United Wholesale Mortgage, the hottest company in one of the hottest industries in America right now.

Ishbia has led UWM rapidly to new heights of growth as a wholesale provider of mortgages to brokers nationwide that are stamping out approvals as quickly as they can make them to hundreds of thousands of Americans switching homes these days in a Covid-era boom that shows few signs of slowing down.

The markets got a chance to assess Ishbia’s accomplishments in January when UWM went public with a $16.1-billion valuation via a special purpose acquisition corporation. Ishbia’s 70-percent stake was worth more than $12 billion, making him one of America’s 50 richest individuals.

The 41-year-old Ishbia has transformed his father’s company from a sleepy small player to the No. 2 mortgage lender in America, one that is building a two-million-square-foot campus in Pontiac, Michigan; interviewing 300 people a day for new jobs; and counting on rising interest rates to favor it over the competition as the U.S. economic environment changes.

Oh, yeah – the competition. You don’t tug on Superman’s cape, right? Well, Ishbia is going way beyond that and trying to dethrone crosstown professional nemesis Dan Gilbert, the fellow billionaire who’s been hailed as the economic savior of downtown Detroit and also is founder of Rocket Mortgage, America’s largest mortgage broker at the moment.

“I’m just competing; I’m a competitor,” Ishbia told Chief Executive not long after a front-page story in the Wall Street Journal highlighted his philanthropic rivalry with Gilbert involving their mutual alma mater. Ishbia recently made a $32-million gift to the MSU athletic department; then Rocket announced it had expanded its existing sponsorship of the Spartans with a new, five-year deal in which the basketball arena will be relabeled MSU Spartans Presented by Rocket Mortgage.

“We do things one way; what [Rocket] down [in Detroit] is doing is 180 degrees different from us,” Ishbia said. “They’re the opposite. We focus on our people; they take the opposite approach. We don’t get along. We don’t like each other. I respect them; I appreciate what they do. I have nothing but positive thoughts about them, but we want to compete with them.”

Actually, a more significant gambit by Ishbia in this growing competition with Rocket was his move in March to force independent brokers around the country to choose between sending prospective mortgage deals to UWM or to Rocket. If they wanted UWM to handle their deals, these brokers had to sign a document stipulating they would cease any business relationship with Rocket or with Wisconsin-based Fairway Independent Mortgage.

UWM trails Rocket in overall underwritings but is the nation’s largest wholesale lender. Ishbia alleged that Rocket and Fairway try to undercut the wholesale side of the mortgage industry in order to boost the retail side, where Rocket dominates, and to steal business from independent brokers, where UWM dominates. By the time of the mid-March deadline, UWM said, about 90 percent of the approximately 3,200 brokers who’d worked with both Rocket and UWM opted to remain with Ishbia’s company.

While Ishbia is playing hard ball now, he said team ball is what has gotten UWM to these heights. After graduating from MSU, he went to work for his attorney father, who’d founded UWM as a side business and had only about a dozen employees in 2003. Ishbia grew the company rapidly, especially after housing recovered in the wake of the Great Recession, by establishing a handful of pillars. Building an effective team may be the most important.

Ishbia drew many lessons from MSU coach Tom Izzo, a legend who always seems to have his teams prepared for spring tournament basketball even if they’ve occasionally had a middling regular season. Ishbia has tried to imbue UWM with that kind of capability by hiring, at different levels and in a variety of roles, a handful of his former national-title teammates. “The team with the best players wins,” Ishbia said. “So you’ve got to get great people around you.”

Izzo also taught Ishbia to bring consistently whatever his talents and commitment could provide. “I learned so much from him, but one big thing is accountability: If I want to be a great leader, I need to hold people accountable,” Ishbia said. Izzo “was great at knowing what I was capable of, and I had to be at that level very day.” Also, Ishbia said, the coach taught him “to treat people kindly and appreciate them and show them that you care. And to treat people with respect.”

UWM has been able to assemble a leadership team that is “like-minded in work ethic and attitude,” Ishbia said. “We can teach you mortgages and marketing and finance. But you have to bring a great attitude and work extremely hard.”

Such a culture and its crucial camaraderie has been harder to maintain during Covid, Ishbia said, but UWM has been so busy that remote work hasn’t been a big hindrance. “We’re a much better company when people are here together, so when we can do that in June or July, we’ll be a stronger company,” he said. UWM’s new campus is located near downtown Pontiac, a major Detroit suburb whose urban essence arguably hasn’t recovered apace with that of its much bigger neighbor.

Covid pressed UWM’s technological advantage and the company responded positively. “The general market closes a mortgage in 50 to 52 days, but we’re close to 17 or 18 days now,” Ishbia said. “We want to make it 10. We also have made the process much easier for the consumer. If we make it simpler and eliminate more hassles, we’ll continue to win. If our interest rates are lower than the market and our speed to close is better, we’ll continue to accelerate.”

In fact, Ishbia said, he predicts UWM will prosper more than many rivals as interest rates rise with the budding economic recovery and with pressures for higher rates introduced by trillions of dollars of new government spending. “Higher rates are natural,” he said, “but that’s where we win. We win in the home-purchase market. Our biggest competitor does 93 percent refinancing. But there’s nothing to refinance if rates are 3.5 percent instead of 2.5 percent. So rising rates will impact my chief competitor” – meaning, of course, Rocket – “a lot more than me.”

Ishbia acknowledged that “we can’t keep doubling our business every year. It’s about refining ourselves and getting better and making the process faster and easier for brokers and consumers. We have inches to gain, not feet. But not a day goes by when we aren’t improving.”


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