The biggest broker shops these days look a lot like quasi-lenders: They have thousands of LOs. Their own processing companies. They have sticky JVs or MSAs w/ real estate brokerages. And feature generous-but-often convoluted comp structures.

Many of these companies have transitioned from pure brokers to hybrid non-del correspondents, relying heavily on flat-fee comp models and/or 100% commission splits to woo new recruits. And they’re pretty much all plugging into UWM or Rocket’s infrastructures to supercharge growth. 

UMortgage’s Anthony Casa last week unveiled a new model for his company, one that he says features a true differentiator in the space: a tech platform that feels UWM-like in terms of ease & efficiency, combined w/ a new comp model that measures up to national brokerage rivals.

In today’s edition of The Mortgage Scoop, we dive into the strategy & examine the fascinating evolution happening in wholesale. Plus, Rocket’s TPO leadership shakeup, a $425M IMB calls it quits & much more.

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UMortgage is eliminating its 50-bps corporate margin structure & sunsetting its non-del business. Going forward, the company will operate as a pure broker platform, charging LOs a $995 flat fee per loan, w/ a corporate margin cap of $49,750 per year (50 units). The comp model is paired w/ UMortgage’s ARIVE-integrated tech platform, Tempo.

Casa says the move positions UMortgage to have a scalable broker platform capable of supporting 1,000 LOs by year’s-end. In the real estate brokerage space, capped revenue models enable agents to form teams, scale quickly & retain more of their production once brokerage costs are satisfied. This is the core structure that propelled eXp & Keller Williams. 

The mortgage broker channel is ready for the same shift, according to Casa. His strategy targets both small broker-owners who lack the volume to hire & scale efficiently, as well as independent producers looking to increase earnings from traditional 125-bps payouts to 200-plus bps while building teams inside a larger platform.

UMortgage’s Tempo platform—which integrates CRM, finance, compliance & wholesale lender connectivity—is the critical infrastructure here. Casa says UMortgage has built a system where brokers can access multiple top wholesale lenders w/ speed that rivals the market leaders, w/o LOs being captive to a single outlet.

“We’ve invested heavily in dialing in ARIVE & building direct integrations,” he said. “Our brokers can operate w/ real lender choice & still deliver a competitive turn time & borrower experience.”

Last year, about one-third of UMortgage’s production went to UWM, a sharp contrast to many large national brokerages that route the majority of their volume to one or two lenders.

“Choice only matters if it’s real,” he said. “If most of your pipeline goes to one lender, that’s not optionality—that’s dependency. We believe brokers should have transparent pricing & genuine access to multiple competitive outlets.”

UMortgage’s pivot comes as most of his rivals double down on non-del. Casa said holdbacks in non-del in particular have increased. “At that point, you’re operating more like a retail lender than a broker. Our position is simple: we want to compete purely on broker pricing & transparency.”

My take on this strategic shift 💭

UMortgage’s previous model limited how much Casa could scale & made the company vulnerable to poaching, even if it was profitable in ‘25. If UMortgage is able to hit 40K or 50K units annually, that majorly changes the economies of scale. UMortgage could invest in insurance programs, ancillary services & other stuff that just isn’t doable at smaller volumes. 

The other thing I’ll be watching closely: Combining ARIVE (which Casa knows a thing or two about) as a broker portal/POS & a full suite of tech tools that enable LOs to get a UWM-like experience w/ a slew of different lenders, could be pivotal.

I often hear that brokers go w/ UWM or Rocket b/c they want the certainty & speed, even if other lenders feature better pricing. LOs simply get addicted to the process & reliability. But if there were other easy, reliable & fast options w/ more competitive pricing, all powered by ARIVE, that could change the dynamics of the space quickly...

Mike Fawaz has left Rocket Pro, the second prominent departure in as many months following Dan Sogorka’s pending exit. By Rocket Pro standards, Fawaz is an OG. He established many key relationships w/ broker shops & has been one of the most visible faces at Rocket Pro. Austin Niemiec has returned as TPO boss…

A few thoughts:

Re that last point, Rocket says it’s not the case. Not at all.

“With Austin now leading Rocket’s broker channel, we’ve never been more committed to Rocket Pro, and we are excited to share what’s ahead — beginning with Ignite 26 later this month,” a spokesperson told NMP.

I’ve reported quite a bit on Rocket’s retail integration of Redfin (effectively Rocket Local Part Deux) & Mr. Cooper (call center refis), but relatively little overlap has occurred w/ mortgage brokers. I expect details at Ignite on Thursday about how brokers can benefit from Redfin/Cooper leads. As for Fawaz, he will announce his next destination in March. 

Virginia-based IMB City Lending has shut down, according to NMN. CEO Jorge Campodonico shared the news on LinkedIn. The IMB did $446M in origination volume in ‘24 but shut down after “reassessing an evolving regulatory environment and continued market consolidation.”

"It was a deliberate decision based on the realities facing independent mortgage lenders today," he told NMN. "While it's never easy to close a company you've built, I believe it was the responsible course of action given the circumstances."

As Coby Hakalir noted, “This CEO built this company over 13 years and made an orderly exit — he saw the runway ending before it ended. The big question it raises is how many other mid-size IMBs are looking at the same math right now — and what happens to them?”

RETR’s James Hooper has another great newsletter today on recapture trends. RETR crunched the numbers & found that a small group of institutions captures a disproportionate share of runoff dollars. It’s the usual suspects (Rocket, US Bank, Wells, Pennymac, Freedom, loanDepot, Navy Federal, Discovery Bank, PHH, Select Portfolio Servicing). Check out which firms captured another originator’s refi:

Rocket, Pennymac, CCM & US Bank are all major recipients of bank runoff volume, while Pennymac, PHH, Rocket & US Bank also consistently captured a meaningful share of IMB volume. Brokers cede the most volume to Pennymac, Rocket, PHH, Mr. Cooper & Lakeview, RETR found.

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