Mat Ishbia, United Wholesale Mortgage CEO, joins Yahoo Finance’s The First Trade with Alexis Christoforous and Brian Sozzi to discuss the company's plans to go public through a SPAC transaction with Gore Holdings valued at $16.1 billion dollars, the importance of team culture, future outlook, and much more.

Video Transcript

ALEXIS CHRISTOFOROUS: United Wholesale Mortgage is gearing up to go public in just a couple of months through a SPAC transaction with Gores Holdings valued at $16.1 billion. The CEO of UWM, Mat Ishbia, joins us now to discuss that and more. Mat, good morning, and good to have you here.

MAT ISHBIA: Morning.

ALEXIS CHRISTOFOROUS: So you've been exploring just how to go public for about a year now. Why was a SPAC the way to go, not a traditional IPO or even a direct listing, for that matter?

MAT ISHBIA: Yeah, you know, when we looked at the opportunity go public, we got a chance to meet the Gores team, you know, April or May. And I think the reality is this, you know, you only go public one time in your life, most likely, and our plan was I'd love to have someone riding shotgun and showing me how to do it, showing me they've had experience. And the Gores team, Alec Gores has such a great background in this and SPACs.

And so, you know, IPO versus SPAC, what's the better way? You know, when I did all my research and got a lot of reference checks, we really felt going with Gores and doing it via SPAC was a more efficient, more certain and more streamlined way to do it while we can continue to run the business. We're not a startup company. We have 6,700 people, so we have a lot of things going on here. We want to keep running the business effectively, and at the same time, have the opportunity go public and add new shareholders to our team.

BRIAN SOZZI: Mat, going through the filing here, through August, you guys have reported about I think adjusted net income of $1.3 billion. Last year, all of last year, you did 318 million. That's a pretty big jump. For those not familiar with your business, why that big jump?

MAT ISHBIA: You know, we've been growing. We've been growing for years. So for a while, it's been always, you know, build a business. You know, when I started here 17 years ago, there was 12 people at UWM, and so the growth has been substantial. But the real growth is because of the mortgage broker channel. Consumers want to get the fastest, easiest, cheapest mortgage, and it's always through a mortgage broker, and everyone starting to see that.

You go to findamortgagebroker.com, you find a broker that shops on your behalf. And so as that channel has been growing, UWM has been growing as we're 33% of the wholesale channel. So we're the biggest player in the smaller market, but that market is growing, and it's going to continue grow. Now, we're the number two overall mortgage company, and we plan on continuing to grow to eventually take over the number one spot.

BRIAN SOZZI: Now, when I see that type of jump, my first thought is you guys are taking a lot of risks out there, especially with rates so low. Are you taking on any subprime mortgages? Have you dabbled in that market? What's the philosophy inside the company?

MAT ISHBIA: Yeah, it's a great question, Brian. So actually, we were actually the reverse. If you look at the top 25 mortgage companies in America, where you want to put Wells and Rocket and Chase and all these people. We're always number one or number two with the highest credit score. We actually pick the best loans. We're a little bit more unique. We don't do non QM, which is another way other people call subprime. We don't do them, never have.

You know, we're a family run company and a family business, so we're always thinking long term. We don't do lower credit scores. We don't do certain loans that don't fit our box, and so we're the reverse, and so that growth is really tied to the broker channel and at the same time technology. We have over 900, almost 1,000 technology people at our company, and we're coming up with new-- we just rolled out an app, first ever in it's kind in a wholesale mortgage lending, just the other day, and so it will always come up with new things, and the market share, the loyalty is driven from those things.

ALEXIS CHRISTOFOROUS: You mentioned you have nearly 7,000 workers just a moment ago, and you've been going through this explosive growth here. You're on track for a record year. 2,000 of those workers were brought on in just the past few months, so have you plateaued right now? Are you looking at bring on even more workers in the near term?

MAT ISHBIA: No, we're growing. We're looking to hire. You know, the nice part about our culture, we have a very big-- we're big on culture, team, family here, and so we get about 300 people to apply to work at our company every day. We get recognized as the best place to work in Michigan, best place to work in the country. All that recognition, 300 people a day, so we get 6,000 applications a month, and we pick 400 or 500 great people. We are going to continue to grow. It's all about space in the building.

As we continue to build out right now, everyone's working from or a great majority are working from home because of COVID. But we have a culture and team, and so we are hiring. We're going to continue to hire, continue to build, because there's so much opportunity. The mortgage broker channel will go up by 50% or more, actually, in the next five years, and we're the main player there, so we have to be prepared to handle that to get borrowers cheaper, faster, easier mortgages.

ALEXIS CHRISTOFOROUS: Now, I see that basketball behind you. And for those who don't know, you were part of the 2000 Michigan State Spartans Championship under basketball team Coach Tom Izzo. What did you learn on the court or that you take with you now as CEO of this company?

MAT ISHBIA: You know, yeah, it was such a great experience being part of that team and learning from coaches and so many great players there, Mateen Cleaves, so many superstars. The real thing I learned is about family and team and holding people accountable. You know, the game from coaches all the way down was everyone's got a role. I was the 14th best player on the 14 person team, right? But my role was to be the best third-string point guard in the country.

At my company, now, I'm the CEO. I have to be the best CEO in the country, but then at the same time, I got to have the best receptionist in the country, the best underwriters, and so everyone's got to play the role to make a team work. And at the end of the day, the big thing it also taught me is you got to out-work everybody. You know, I get 24 hours a day to work, and if I can outwork everyone, you know, I might not be as smart as someone, I might not be as talented as someone from a basketball perspective, but if I outwork you, I have a good chance. And that's how we-- that's our culture, that's our team, that's our family here at UWM.

BRIAN SOZZI: Mat, well, one thing favorable for your business model others like it is the banks have a lot of regulation. Ultimately, is a Joe Biden win in November very good for your business under the thinking that under that presidency banks might be seeing more regulation and you gain market share?

MAT ISHBIA: You know, actually, so yeah, Brian, it's interesting you'd say that. You know, we actually win at UWM with more regulation, because what regulation does is it's always focused on who? The consumer. Making sure the best thing-- so when TRID came out and all these deals through Dodd-Frank, from Richard Corey and from the CFPB, everyone says that's going to hurt mortgage companies. No, it doesn't, actually, it helps consumers. Things that help consumers, more regulation, help people that are actually 100% aligned, and that's what our wholesale mortgage lending is about. And so whether it's Biden, whether it's Trump, you know, we're agnostic to it. We believe that the more regulation actually creates more barriers to entry, and it makes it so it's better for consumers. Better for consumers means better for UWM, and that's how we think about it.

ALEXIS CHRISTOFOROUS: All right, Mat Ishbia, CEO of United Wholesale Mortgage, thanks for coming on, and good luck with the SPAC.

MAT ISHBIA: Thanks so much. Thanks for having me.