A laptop is open to United Whole Sale Mortgage (UWM) stats in the stock market on a table in a coffee shop.

This was a front-page story in the WSJ yesterday: United Wholesale Mortgage Goes Public.

United Wholesale’s (UWM’s) valuation was $16 billion and they will get a cash infusion of over $900 million.


Very few people outside of the mortgage world took notice b/c UWM is primarily a “Wholesale Lender.”

This means that they are a mortgage bank that services the broker channel.

In this 2019 blog, I discuss the three main channels that underwrite and fund mortgage loans: (1) banks and credit unions; (2) mortgage banks; and (3) mortgage brokers.

Commercial banks and mortgage banks underwrite and fund loans “in house” and then either hold their loans in a portfolio (commercial banks only) or sell their loans on the secondary market after they fund (the vast majority of all loans).

Mortgage brokers, however, only “originate” loans and then submit their loan packages (completed application, credit report, appraisal, income docs, etc.) to whatever “wholesale lender” (like UWM) offers the best rates and/or service.

The broker channel almost died off after the 2008 housing meltdown b/c brokers were largely blamed for the crisis.

Much of the blame was justified too b/c licensing standards were very lax, and many brokers were shockingly dishonest, lying to both borrowers and lenders in order to close loans and make more money.

That is not the case today.

I know many exceptionally competent and honest loan officers who thrive in today’s broker channel.

Licensing standards, better regulatory enforcement, social media reviews (the slimeballs from 2006 would get roasted on social media today) and much tougher competition have restored the luster to the broker channel, and that is the channel that UWM services.

In any case, few people in the Realtor world heard about the UWM headline yesterday b/c they never interact with UWM but instead only interact with the brokers who submit loans to UWM.


The broker channel has many advantages for loan officers including flexibility (can submit to multiple different lenders and shop for all kinds of loan products), low rates for conforming and FHA loans, and low overhead (maintaining an entire underwriting/banking division is very expensive).

There are disadvantages too, and this is why we left the channel in 2015.

  1. Appraisals. The big wholesale lenders forced us to use national appraisal management companies, and we had appraisal issues far too often. In contrast, at our current mortgage bank, we are able to compliantly employ our own stable of qualified appraisers.
  2. Turn-times. We could not control turn-times or offer consistent fast closes (something we plan to restore soon btw).
  3. Jumbo pricing. The broker channel simply does not offer competitive jumbo mortgage options for a variety of reasons. B/c we are so dependent on competitive jumbo pricing, we could not survive in the broker channel in 2020.


They are going to spend it.

More particularly, they are going to spend it on new tech, infrastructure and efficiencies that will allow them to close far more loans with far fewer people.

This is the holy grail that every lender is chasing right now, and whoever gets there first will be able to offer consumers much lower rates and much better service.

Any loan officer or lender that is not literally obsessed with this now will not be around five years from now.

We are shooting to close about $125 million in loans this month (a record for us), but it is our goal to fund well over $200 million per month next year at this time…with about the same number of people.

And – I am certain we will get there b/c we are so focused on the goal right now.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167

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