Will Mat Ishbia run the Phoenix Suns like United Wholesale Mortgage?

Mike Kortas is pumped about his team's chances.

That team happens to be the Phoenix Suns, the fifth winningest by percentage in National Basketball Association history, but one that can never quite win an NBA title. But that all could be changing.

On Feb. 6, Mat Ishbia, the CEO of United Wholesale Mortgage, purchased a 57% stake in the Suns, who are valued at $4 billion. Ishbia also purchased a majority stake in the WNBA's Phoenix Mercury. Within two days, Ishbia had successfully pushed Suns management into trading for the brilliant if mercurial basketball superstar Kevin Durant.

It seemed an indication that Ishbia would run his basketball team with the same aggressiveness that he's run his mortgage company.

"What you have in Mat is a man who won't lose," Kortas said. "He is willing to do whatever it takes."

Now, Kortas – who has center court season tickets to Suns games – has a very practical relationship with Ishbia. No company underwrites more loans from Kortas's mortgage brokerage firm, Nexa Mortgage, than UWM.

Still, even mortgage industry insiders who don't rely on Ishbia's business describe him more as a pugilistic conqueror than an executive who creates and sells loan products.

"Mat is a warrior," declared Paul Hindman, who is a mortgage broker consultant at HomeLend. "He has 'competitor' running through his veins."

"He expects singular loyalty to create mutual value," Hindman noted, adding, "For those that fit, it's clearly working."

Ishbia's Suns ownership has propelled him into the rarefied air of competitors like Michael Jordan, who owns the Charlotte Hornets, and other corporate gladiators – including Cleveland Cavaliers owner Dan Gilbert, the CEO of UWM archrival Rocket Mortgage.

But Ishbia's Suns endeavor brings scrutiny to how he treated competitors, mortgage brokers and employees on his way to national notoriety. Interviews, safety citations – and multiple unresolved lawsuits – regarding UWM raise several questions, each leading back to one main thought: Is it really okay to run a business in 2023 like you would run an ultra- competitive basketball team?

Ishbia declined to participate in this story. A spokesperson cited his schedule and prior commitments. UWM also declined to answer specific questions, instead providing a written statement that will be quoted from below.

Ishbia grew up in the prosperous Detroit suburb of Birmingham, the son of Jeffrey Ishbia, a prolific entrepreneur who since 1990 has co-operated the personal injury and business litigation law firm Ishbia & Gagleard. Jeffrey Ishbia founded United Wholesale Mortgage in 1986.

Mat Ishbia attended Seaholm magnet high school and then Michigan State University where he netted a Business Administration bachelor's degree in 2003. The star point guard at Seaholm, Ishbia scrapped his way onto the high-profile Michigan State basketball team as a walk-on, and later snared an athletic scholarship. He was part of Michigan State's 2000 national championship team, and the 2001 squad that returned to the Final Four.

Ishbia's 2019 book "Running the Corporate Offense: Lessons in Effective Leadership from the Bench to the Boardroom" characterizes playing at Michigan State for coach Tom Izzo as a formative – perhaps the formative – experience in Ishbia's business philosophy.

"The spirit of basketball drives my behavior and leadership style every day," Ishbia wrote.

But at five feet ten inches, Ishbia hardly played in Michigan State's games.

Nor did Ishbia, who is white, superficially share much in common with a mostly Black team dubbed "The Flintstones" for its numerous players from Flint, Michigan and other economically besieged Midwestern cities. For example, Ishbia's most talented teammate was future NBA star Zach Randolph, who grew up destitute in Marion, Indiana and spent adolescence shuttled between juvenile detention homes.

Ishbia has addressed his contrasting background from his teammates.

"Fitting in was way more important than showing off what I had. I made sure I wasn't Mat Ishbia from Birmingham but Mat Ishbia the ultimate team player," he wrote in his book.
Ishbia said this March in a WDIV-Channel 4 Detroit interview that he employs seven former Michigan State teammates.

He spent a year as a student assistant for Izzo, and then faced a fork in the road: Become an assistant basketball coach at Cleveland State University, or help his father run UWM. Ishbia chose his dad's business and then grew enchanted with mortgages, or at least the industry's parallels to hoops.

"The mortgage business is actually structured very much like basketball. It's competitive and allows you to track wins and losses against your rivals," Ishbia wrote in his book.

Ishbia ascended to CEO of UWM in 2009. It was right after a cataclysmic reordering of the home loan market that perhaps really did make mortgages more like a sports league. 

"During the Great Recession many banks pulled away from originating mortgage loans. They instead began giving credit to non-bank lenders," said Sanket Korgaonkar, an assistant professor of commerce at the University of Virginia, who focuses on the U.S. mortgage market.

Then, under federal conservatorship, Fannie Mae and Freddie Mac set up the rules of the game: Originate loans at more conservative underwriting standards and we'll buy them.

Ninety-four percent of UWM loans were sold to Fannie or Freddie in 2022, or transferred to Ginnie Mae, another government-owned corporation, according to UWM's annual report.

"Fannie and Freddie can dictate the size of the industry pie," Korgaonkar said, with the other main industry driver another government actor: Federal Reserve action on interest rates.

Bestowed these clear parameters – borrow money to originate conforming loans, sell those loans to the government, rinse, repeat – Korgaonker sees three main ways non-bank lenders try to rise above the competition: customer service, speed in closing a loan, and fees.

Ishbia's insight was making UWM a wholesale lender, in the business of serving mortgage brokers instead of borrowers. Instead of a fee to those taking out the home loan, UWM charged a flat, per-loan fee to brokers who in turn shepherded consumers through the lending process.

"UWM was to my knowledge the first lender to really go all in on wholesale," said Katie Sweeney, who is the president of the Association of Independent Mortgage Experts, a trade group focused on wholesale lenders.

UWM also developed tech platforms with names like Bolt and Ease to speed up processing a loan. UWM says it closes loans in 18 days compared to an industry average of 50, per the annual report.

"The sales software they developed has micromanaged the system for them," Kortas said.

In addition to a workforce of over a thousand IT specialists, UWM also has north of a thousand account executives, or the people that interact with mortgage brokers.

"A lot of account executives have 100s of accounts. But Mat's got 27 account executives assigned just to us," said Kortas, who added these customer service specialists are seemingly always available to the 2,230 loan officers at Nexa.

UWM takes pride in their swift response time to brokers and quickly getting a mortgage application to the finish line.

"UWM sets the tone, the speed and the expectations mortgage brokers have come to know they and their borrowers deserve," UWM said in its statement provided to National Mortgage News.

UWM went public in January 2021, claiming a valuation of $16 billion and a perch as the largest U.S. wholesale lender by sales volume. Though, as of deadline, the company's valuation has been sliced in half amid a shrinking mortgage industry pie, UWM overtook Rocket as the largest lender period.

UWM won.

The CEO, his father, Jeffrey, and his brother, Justin Ishbia, own 94% of the company through an entity called SFS Holdings Corp., according to public filings.

Additionally, as Inside Mortgage Finance first reported, Ishbia racked up $4 billion in pre-stock dividends prior to buying the Suns stake, and $500 million from UWM's initial public offering.

As of April 23, Ishbia's net worth was $8.43 billion, according to Bloomberg. He is one of the 300 wealthiest people in the world.