More than two-dozen current and former United Wholesale Mortgage (UWM) employees say the wholesale lender has fostered a toxic work environment, with allegations of racial disparities, sexual harassment, drug use and bullying by managers, according to a report published by Bloomberg on Wednesday.
None of the workers interviewed said CEO Mat Ishbia used racial slurs or sexually harassed employees, but former employees told the outlet that UWM managers openly berated subordinates and made sexually suggestive remarks. Other employees told the outlet of repeated drug use by sales staff, managers and executives, as well as a pressure-cooker environment seemingly designed to push workers out.
UWM Chief Marketing Officer Sarah DeCiantis said Bloomberg’s portrayal of a hostile workplace was “false and misleading.” UWM gave Bloomberg hours of on-the-record interviews with company team members and executives, detailed answers to dozens of questions and a personal tour of its 1 million-square-foot campus, saying it has been completely transparent with Bloomberg.
UWM, DeCiantis said, “has operated for almost 40 years and has employed close to 20,000 team members, and there is nothing, in all that time with all those great people, that suggests this story is anything more than disgruntled individuals or a competitor pushing a false narrative to the media.”
The report comes two months after Ishbia purchased a majority stake in the Phoenix Suns from Robert Sarver, who himself was forced to sell the team after the National Basketball Association found Sarver had engaged in racist and sexist behavior. The deal closed in February and valued the franchise at $4 billion.
Among those who claimed to have seen cocaine use while working at UWM was Matt Hutchinson, who left the company in June 2021 after nearly three years. Hutchinson told Bloomberg that his manager invited him to do a bump of cocaine at a client event in front of a mortgage broker who worked with the company.
More than half a dozen sales employees claimed to have seen drugs on campus, which UWM denied. Police records obtained by Bloomberg show UWM security called local police twice to report cocaine found at work during a five-week period in the fall of 2021.
UWM lawyers told Bloomberg they found no evidence of drug use complaints and said that the company does not tolerate “cocaine or any drug use.” Similarly, the company does not tolerate race-based discrimination or sexual harassment, the lawyers wrote.
Taryn Dover, a 35-year-old former underwriter and team leader who left in November after what she said was a demotion, alleged that colleagues and managers often discussed sex in the workplace. One manager, she told Bloomberg, talked about bringing employees home with him to have sex.
Dover is one of five Black employees interviewed by Bloomberg who said managers held Black staffers to a different standard than white colleagues. Management often cited her attitude, she said. “I couldn’t count on both hands the amount of times my attitude” came up, Dover said. “I was always ‘coached’ on making sure I wasn’t aggressive.”
The company’s lawyers said they could find no evidence of racial discrimination against Dover.
Two other Black employees who complained about working conditions were threatened with termination, and one of them was fired, Bloomberg reported, citing a complaint filed with the National Labor Relations Board in 2021. The NLRB found sufficient merit for the case to proceed, but UWM settled the case and provided back pay to the fired employee. UWM’s lawyers said that the firing was for poor performance and “worsening negative attitude,” and had nothing to do with race.
Others complained about alleged cocaine-fueled parties at executives’ houses and venues around the Detroit area, according to Bloomberg. The wholesaler’s lawyers said the company has no role in private gatherings and can’t speak to the off-duty conduct of its employees but such events as described were not “consistent” with UWM’s values and culture.
Bloomberg reported that some employees were upset about sales staff and managers commenting about the attractiveness of new employees whose photos were included in in-house emails. Others complained about being mandated to send videos to brokers, which sometimes led to unwanted interactions and comments about their looks. UWM’s lawyers told Bloomberg it could find no record of complaints on either count.
In one case, Bloomberg reported, a longtime executive repeatedly berated a subordinate in public. The same executive, who has worked at UWM for more than 20 years, allegedly told a saleswoman in her 50s last year that strong women come across as “bitches,” and repeated the term twice more before the employee asked him to stop, Bloomberg reported, citing sources. UWM’s lawyers said the executive denied bullying anyone and the company doesn’t tolerate physical intimidation or threats.
Some former workers told Bloomberg they left UWM because managers instituted extremely difficult daily targets, a practice known internally as “running plays.” They said the practice seemed designed to make staffers miserable and quit. UWM denied it created targets that workers can’t hit.
On the heels of a rising-rate environment, UWM’s employee headcount fell to about 6,000 at the end of 2022 from 9,000 in June 2021, according to the company’s filings. Ishbia promised never to have a layoff when its rival Rocket Mortgage announced layoffs in April. A spokeswoman for UWM attributed the decline in staff to a mid-2021 return-to-office policy.
The Pontiac, Michigan-based company has grown to become a dominant player in mortgage lending. In the third quarter of 2022, it overtook arch-rival Rocket Mortgage as the largest mortgage originator in America.
The company, founded by Ishbia’s father, has used hardball tactics and cut-rate pricing to grow volume at the expense of margins. In the fourth quarter, UWM’s GAAP loss was $62.5 million. Executives on the fourth-quarter earnings call said UWM expects margins to improve in the first quarter amid various new initiatives.
Those initiatives include “Control Your Price,” which gives brokers 125 basis points to play with to reduce pricing for customers; a new construction-to-permanent loan program; and a conventional 1% down mortgage program, in which UWM will gift borrowers up to $4,000 on conventional loans.
In the most recent quarter, UWM originated $25.1 billion in mortgage loans compared to Rocket’s $19 billion. Most mortgage analysts expect UWM to again outpace Rocket in the first quarter.