The mortgage panorama is altering quick, with the 2 largest gamers making main strikes to extend their market share much more.
At the moment, prime mortgage lender UWM introduced it was shifting to in-house mortgage servicing, a strategic change designed to recapture extra repeat enterprise for its huge mortgage dealer community.
The corporate is already the #1 mortgage lender by a wide margin, however maybe to fend off its crosstown rival Rocket, it’s getting proactive to safe that lead.
In a nutshell, bringing servicing in home will allow the corporate to higher management its steady of present prospects and ideally promote them one other mortgage sooner or later.
Should you’re an present home-owner with a mortgage, this can be a good reminder to buy round past the corporate that companies your mortgage.
Mortgage Recapture Is High of Thoughts
In case you missed it, again in September UWM launched a new initiative called KEEP, designed to assist its mortgage dealer companions drum up extra enterprise.
KEEP leans on AI to constantly monitor the corporate’s mortgage database to determine any debtors who may gain advantage from a mortgage refinance, or maybe a second mortgage like a HELOC or home equity loan.
This info is tailor-made to the borrower and consists of the contact information of the originating mortgage dealer to allow them to win the enterprise once more.
The concept is to KEEP the shopper for all times, as an alternative of merely offering them with one dwelling mortgage and transferring onto a brand new prospect.
It’s generally known as “recapture” within the mortgage world, the place you originate each the unique mortgage and the brand new mortgage.
It really works as a result of loans are sometimes bought to buyers shortly after origination, that means the dealer and UWM can revenue a second time, a 3rd time, and so forth.
Lately, Rocket Mortgage announced plans to acquire Mr. Cooper, the nation’s largest mortgage loan servicer, for this very cause.
Rocket is aware of it’s good at origination (gross sales), so buying an unlimited ebook of enterprise is a good way to turbocharge progress.
That is particularly vital with lending quantity lots thinner than it was and new enterprise tougher to return by.
And it’s most likely what sparked UWM to convey its personal mortgage servicing in home, versus working with sub-servicers like Mr. Cooper.
It’s no coincidence they severed their agreement with Mr. Cooper in early April, simply days after the Rocket announcement.
Going ahead, UWM needs full management of the loans it originates on behalf of its fleet of mortgage broker companions.
Equally, Rocket is mainly bringing mortgage servicing in home as nicely through its Mr. Cooper acquisition.
Stronger, Stickier Relationship with Mortgage Brokers
Within the news release, UWM President and CEO Mat Ishbia heralded the transfer as “an enormous win for UWM and, extra importantly, the dealer group.”
He added that it’ll create a “higher expertise for debtors and a stronger, stickier relationship with their brokers.”
The concept right here is that UWM could have management of that mortgage after it funds, as an alternative of a third-party firm holding the info and attempting to originate loans itself.
With out managing the servicing themselves, an organization like Mr. Cooper might mine the database and use its personal workforce of mortgage officers to make cellphone calls and “steal” that enterprise.
Going ahead, UWM would be the one holding the playing cards, a technique they consider will enable them to garner extra repeat enterprise and referrals, whereas additionally having fun with associated price financial savings.
Keep in mind, it’s tougher (and costlier) to exit and discover a new buyer than it’s promote one thing to an present one.
UWM’s New Mortgage Servicing Portal Powered by ICE
UWM’s new servicing platform will likely be powered by ICE Mortgage Expertise’s MSP mortgage servicing system.
It incorporates a home-owner portal that’s designed to “preserve debtors engaged by way of the lifetime of a mortgage” through “sturdy retention and recapture options.”
My guess is stuff that’s extraordinarily tailor-made to debtors, similar to emails and alerts that show their present mortgage price, out there dwelling fairness, and choices to faucet into it or decrease funds.
The portal may also incorporate loss mitigation choices to help owners dealing with hardship, together with streamlined lien releases.
And it’s all supposed to maintain you within the UWM ecosystem, as an alternative of looking for out a mortgage elsewhere.
What makes it considerably unusual is that brokers who work with UWM are impartial and may theoretically ship loans to any of their wholesale lender companions.
So there’s no actual assure a mortgage they initially despatched to UWM will return to UWM if it’s refinanced sooner or later.
However maybe this will increase the percentages of that taking place. It reinforces one thing I’ve stated time and time once more; if a lender reaches out, attain out to different lenders.
Remember to put within the time to buy round to make sure you obtain one of the best deal, whether or not it’s the bottom rate of interest and/or fewest charges. Loyalty is nice so long as it’s deal for you.
Learn on: What is Mortgage Matchup?
Earlier than creating this website, I labored as an account govt for a wholesale mortgage lender in Los Angeles. My hands-on expertise within the early 2000s impressed me to start writing about mortgages 19 years in the past to assist potential (and present) dwelling consumers higher navigate the house mortgage course of. Comply with me on X for warm takes.