United Wholesale Mortgage is continuing its us-or-them mentality when it comes to working with anyone associated with Rocket Cos. by ending its relationship with Mr. Cooper, the company confirmed.
“UWM will be discontinuing our subservicing relationship with Mr. Cooper, and they will no longer be [a mortgage servicing rights] sale partner,” a company spokesperson said in a statement to National Mortgage News.
The company did not disclose any further details about the decision to drop Mr. Cooper, nor who would subservice the portfolio. The news was first reported by HousingWire.
Mr. Cooper subservices a total of more than $820 billion worth of MSRs, said Eric Hagen, an analyst with BTIG, in March 31 commentary regarding the deal, which was issued before UWM’s plans became clear. But the exact amount of UWM’s contribution is unknown.
“We contemplate how sticky some of the MSRs could be considering a chunk of United Wholesale’s $240 billion of MSRs sit with Mr. Cooper,” Hagen wrote. “We expect the deal could also strengthen the value and connectivity for subservicing clients like Annaly, which are subservicing clients of both Mr. Cooper and Rocket.”
UWM probably uses multiple subservicers for its portfolio, an April 3 flash note from Bose George said. George put UWM’s total portfolio at $230 billion.
“Even if Mr. Cooper serviced half, which we think is very unlikely, the earnings impact on Rocket is likely to be negligible,” George wrote.
He estimated total subservicing revenues for Mr. Cooper are around $25 million, which would equate to around 0.5 cents of earnings per share.
“This action was not surprising given UWM’s historical combative relationship with Rocket,” George said. “We are not expecting similar actions from other subservicing partners, and we believe many subservicing partners are likely to welcome being part of the Rocket umbrella.”
In March 2021, UWM unveiled its “all-in” initiative, barring any brokers it does business with from selling loans to Rocket or Fairway Independent Mortgage. Fairway, which was not a large wholesaler to start with, is no longer in that channel.
Earlier this week, two federal judges in Michigan, refused to dismiss lawsuits filed by UWM against brokers over the ultimatum.
