Collusion Between Mortgage Industry Giants?

Although growing its volume of loans over the past year, United Wholesale Mortgage (UWM) has been plagued with a number of self-inflicted wounds that may have severely impacted its share price while enriching its primary owners, Mat Ishbia and his family. Now, Ishbia appears to be teaming up with his friend Anthony Casa to build an enterprise of mortgage originators to compete against the independent broker channel he claimed to support.

Ishbia’s wealth – on paper – is closely tied to the value – on paper – of UWM. And with the precipitous fall in UWM shareholder value, Ishbia’s fortune has dropped as well. Falling nearly in half from over $13 billion a year ago to a still impressive, yet much smaller, $7 billion today. Ishbia, however, has been able to make some of his wealth liquid by pulling money out of the company. Holding the vast majority of the voting shares of UWM ($UWMC), Ishbia convinced the company’s board to pay a 10 cent per quarter dividend – essentially creating a multi-million dollar quarterly annuity for himself.

This in addition to odd business decisions that seem out of step with a steady corporate culture focused on returning shareholder value and building employee morale:

• Early in 2021, Ishbia issued an unprecedented and widely unpopular ultimatum to independent mortgage brokers ordering they cut ties with UWM’s top competitors – limiting options for brokers and consumers.
• When the Federal Housing Finance Agency announced the elimination of the .5% Adverse Market Refinance Fee, UWM delayed implementing the government’s decision, banking the proceeds – and costing consumers unnecessarily.   
• Ishbia had a short lived cryptocurrency-for-mortgage payment gimmick, which the company ditched just a couple months after its inception. 
• Ishbia had to change course within 48 hours of announcing a plan to sell an additional 50 million shares of UWM when the stock tanked on the news.
• And perhaps most concerning, the company’s COVID-19 response has led employees to publicly voice their concerns since the pandemic’s early days. From at least one documented outbreak in August 2020 - which led to more than fifty UWM employees contracting the coronavirus – to just this month, when the Michigan Occupational Safety and Health Administration (MIOSHA) announced they were investigating UWM’s handling of COVID-19.

Now, it appears Ishbia is breaking into the loan origination space – to compete with loan officers (LOs) he purports to support. A Philadelphia-based company run by disgraced former trade association executive Anthony Casa has recently emerged with Ishbia’s fingerprints all over it. Casa’s UMortgage - which was registered with the State of Michigan as Premier Processing - was established by Suzanne Okun. Okun has ties to UWM’s predecessor, United Shore, where she worked as a consultant for years. In addition, an attorney at Ishbia & Gagleard – Mat Ishbia’s father’s law firm – was listed as the resident agent for Premier Processing on incorporation documents.

Ties between UWM and UMortgage extend deep into the company’s ranks of LOs, including UWM-recognized top LOs in California and the Pacific Northwest. UMortgage even employs one in Michigan who recently called UWM “home” and credits Ishbia with mentoring him while he was an employee at UWM. Further, UMortgage appears to be closely following in the footsteps of UWM, hiring its “top-ranking trainer and coach” to develop “end-to-end learning experiences” for its LOs, leadership and other employees.

And one certainly has to wonder how Anthony Casa, with litigation still pending for making a series of obscene and misogynistic comments and videos and sending them to his friends, could build a national broker organization after he was forced to resign from his role as Chairman of the Association of Independent Mortgage Experts (AIME). 

It’s not too much of a stretch to think that Ishbia isn’t just underwriting mortgages, that he’s likely underwriting this venture too. UMortgage’s branding is even eerily similar to Ishbia’s endeavors including United Shore and United Wholesale Mortgage. A February 2020 notice from the New York State Department of Financial Services even suggests UWM’s Chief Strategy Officer Alexsander Elezaj is part of Premier Processing’s ownership group.

Casa’s UMortgage markets itself as a “purpose-driven mortgage company committed to powering Loan Originators with long-term, sustainable success,” with licenses in 39 states while also offering promises for UMortgage LOs to “set up their own legacy.”

Mat Ishbia was recently featured at UMortgage’s virtual sales meeting telling UMortgage LOs to “feel good” because they are part of “one of the fastest growing mortgage companies out there” and “will soon be one of the biggest, if not the biggest mortgage company in America, from a mortgage broker perspective, over the next two to three years.” With his trademark brash enthusiasm, one has to wonder if Ishbia has more to gain by UMortgage’s success.

“You’ve got great leadership,” Ishbia said, referring to Casa. “You’ve got UWM as a partner. We’ve got your back,” he continued. “Partners help partners win.”

And this partnership may be closer than arm’s length. Anthony Casa has long been seen as an Ishbia confidant, to include Casa’s tenure as Chairman of AIME. Before AIME was AIME, it was AIMA – Alliance of Independent Mortgage Advisors – a front group trademarked by UWM, then-United Shore, attorneys. However, after AIMA’s paper trail led to Mat Ishbia, the organization was quickly dissolved and re-organized as AIME, with Casa at the helm.

So is Ishbia leveraging his relationship with Casa to pull that strings at UMortgage – and directly compete with other loan officers – furthering enriching the Ishbia family at the expense of independent brokers and consumers? Time will tell.

Jared Whitley is a longtime DC politico, having worked in the US Senate, the White House, and the defense industry. He has an MBA from Hult International Business School in Dubai.