Fairway breaks silence on UWM’s ultimatum

A week after the deadline to pick sides in United Wholesale Mortgage‘s “all-in” ultimatum to mortgage brokers, Fairway Independent Mortgage is speaking out.

In a conversation with HousingWire on Monday night, company executives said they’ve actually benefited from the ultimatum, which has divided the broker community into two camps.

Since UWM president and CEO Mat Ishbia appeared on Facebook Live on March 4 and announced that brokers could not work with Fairway and Rocket Mortgage and still do business with UWM, Fairway has seen a dramatic uptick in business, according to its CEO, Steve Jacobson.

“We typically had one or two inquiries a week for the broker channel,” said Jacobson, who founded the lender in 1996. “We’re up over 100 inquiries since March 4.”

Fairway, which did about $3.5 billion in the wholesale channel in 2020 (compared to about $62 billion in retail), lost roughly 5% of its broker clients to UWM, according to company executives.


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In an interview with HousingWire, Jacobson mostly wanted to discuss UWM’s broker agreement, specifically a passage in section 2.03 that reads: “The transfer or sale by Broker of a Mortgage Loan locked in by UWM during the lock-in period to another entity, shall constitute a violation of the Agreement, and the Broker shall be liable, and promptly indemnify UWM, for any loss sustained as a result thereof by UWM.”

“What UWM does as a business is their choice and we have been thankful for the extra attention that we have received,” said Jacobson, who has also worked in the industry as a loan originator. “However, there’s a clause in those 19 pages that says if you lock a loan with UWM…let’s say we lock it at 3.5% and rates go to 3.125%, what they’re saying is you have to close that loan with UWM – you locked it with them. And it just means you’ve lost your control. As a broker, the key is your freedom and flexibility.”

Jacobson added that, “As an originator, I would never sign that document. Why would anybody sign that document? Then you might as well just go work for UWM retail. And there’s nothing wrong with it, they’re a good company and do a lot of stuff, but I just cannot imagine anyone signing that document because of that.”

In a subsequent interview with HousingWire, Ishbia said Jacobson was misreading the broker agreement.

“The clause you’re referencing is not unique to UWM,” Ishbia said. “I would say it’s in every mortgage broker agreement. What it’s saying is it protects a lender. I’ve been running this company for 18 years and we’ve never implemented anything on this clause. It’s basically saying, hey if you lock a loan with UWM and then you go back with someone else, you’re double-locking and we want to hold you accountable. There’s no fee, no penalty, no damages. This is just them talking.”

The two executives also traded statements about Ishbia’s original claim that Fairway was poaching LOs from brokers in an “underhanded manner,” the primary reason they were included in the ultimatum with Rocket (whom Ishbia said was training real estate agents to originate loans and cutting brokers out).

“I could share emails with you back from March of last year, I could send you exact emails that they were circling all of our branches,” said Jacobson, who also denied Ishbia’s initial allegation. “It’s not true. What’s true is they were circling our branches and I could send you emails from the CEO of the company that say exactly that, and I won’t do it, because I don’t want to get into that…You can put on the record, I got the emails, okay and all of our attorneys do too.”

In response, Ishbia said he had no problem with general recruiting but thought Fairway’s tactics were cynical.

“Steve’s claims that I sent emails to him – you should see the emails he sent to me,” Ishbia added. “You know why I sent an email to him? Because he was talking negatively about the mortgage broker channel and bashing brokers, so I sent an email that said, ‘Don’t do that – that’s not appropriate. Aren’t you in the wholesale channel? Be a leader. And he didn’t like that response.”

Ishbia told HousingWire that he’s not out to make friends with the CEOs of rival lenders. “My business is not designed to make my competitors like me, especially retail competitors,” he said. “It’s designed for my brokers to be happy, consumers to be happy, my shareholders, my team members. I’m four-for-four with this decision.”

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