The lessons Mat Ishbia learned playing and coaching basketball at Michigan State University helped him turn United Wholesale Mortgage into a leading funder of brokered loans.
For example: He knows the buzz of victory can be short-lived for sports teams and mortgage companies alike. After Michigan State won the 2000 championship, within a few days (if not hours), head coach Tom Izzo was already working on recruiting new players.
Similarly, when United Wholesale emerged as the No. 1 wholesaler by dollar volume at the end of the third quarter last year, "you get to enjoy it for 10 minutes," says Ishbia, the Troy, Mich., lender's president. "Then you worry about the next quarter." (Indeed, Stearns Lending came out of the fourth quarter as the leading wholesaler, with United at No. 2, according to MortgageStats.com.)
United Wholesale will need all the game it can get in this market. Interest rates have been rising, cutting the number of refinance applications. Purchase business has increased but not to the point where these equal the lost refi business. Some experts believe mortgage brokers are better suited to thrive in a refi environment; others believe they have created referral relationships which can get them the purchase business.
Competition among mortgage companies might not get the same limelight as the NCAA tournament, but "it is still just as hard to be the best," says Ishbia, 34. "I don't care how big the stage is, we are always trying to get better, better and better."
At Michigan State, he got a view of both sides by playing (employee) and coaching (management). It gave him an understanding "of what works and what doesn't work and how to be the best. And we're applying that every single day here in every aspect of what we do."
Ishbia came this close to a career as a college basketball coach. After making the Michigan State Men's basketball team as a 5-foot-9 walk on, he played on its 2000 NCAA championship team. He later received a scholarship. With one season of eligibility to play on the team remaining in the 2002-2003 school year, Ishbia instead opted became a student assistant coach under Izzo, who is still the head coach at Michigan State.
"Seeing things from the coach's side was just so eye opening," he says, and that year helped to create the philosophy he now uses to run United Wholesale.
After that season, then-Michigan State assistant coach Mike Garland got the head coaching job at Cleveland State and Ishbia had the opportunity to become an assistant coach there.
Instead, he elected to return to his family's mortgage business. Ishbia's father Jeff founded United Wholesale's parent company, United Shore Financial Services, in 1986. When Mat Ishbia started there, it was originating just 45 to 50 loans a month.
"I didn't know anything about mortgages. My father convinced me to take that same passion, work ethic and energy from basketball and put it into mortgages. If I didn't like it after a year or two, I could get another job somewhere else, go into coaching or do something different.
"But he thought I would love it and he was right. I was able to take that competitive spirit, that passion and energy, all of those things and apply them to mortgages," Ishbia says.
Ishbia puts in 65 to 70 hours a week running United Wholesale, but he says those hours are just part time compared to working under Izzo.
"Coaching basketball was literally a 90 hour a week thing," Ishbia says.
Ishbia could have gone on scholarship to a smaller Division I school or even to a Division II school. "I have this mindset I have to compete with the best at all times. Mateen Cleaves, a hell of a player, I played against him every day in practice. I'm still very close with him. I played against him every single day for two years in practice and there wasn't one day I thought he was better than him. Obviously he is a lot better than me." (Cleaves was picked in the first round of the 2000 National Basketball Association draft by the Detroit Pistons. He went on to a journeyman's career in the NBA, the D-League and overseas.)
The lessons he learned while at Michigan State are the concepts behind United Wholesale's "Six Pillars":
1. Our people are our greatest asset
2. Service is everyone's responsibility
3. We are relationship driven, not transaction driven
4. We are thumb pointers, not finger pointers. (A thumb pointer is a player who holds himself accountable "It is easy to point your fingers and say, 'if he would have made the shot, we would have won,'" Ishibia says. "Instead, point your thumb at yourself and say, 'if I would have made my free throws in the first half we would have won.'")
5. Continuous improvement is essential for our long-term success
6. Our path is paved with fun and friendship
The company's structure is team-oriented and very competitive and management does not have a "player's coach mentality" of going soft on team members, Ishbia explains. "We hold people highly accountable. People don't come in at 9:01 at our company.
"People ask me what happens if you come in late to a Tom Izzo practice or meeting. I say, 'I don't know. It has never happened.' It is the same thing here. People don't come in late."
UWM has high standards for its employees from a knowledge standpoint as well as a customer service standpoint. Those who meet those standards are taken care of, monetarily and otherwise.
"We ask a lot from them and they give it to you. You have to take care of them. Izzo was always great at this. We were in the gym at 6 a.m., working our butts off, but he always took care of us, he always treated us like family, doing all the things he could do to make sure we felt like we were a team and a part of something. But it wasn't all fun and games because we had a job to do," Ishbia says.
There are similarities between running a business and coaching a team. Rick Pitino and Pat Riley both wrote motivational books and are sought-after speakers by businesses, Ishbia notes. Sport coaches also have to deal with players of different temperaments, talents and abilities and come up with a strategy to turn them into a team; managing a business requires the same skills (although on a much larger scale).
Ishbia's father has the same work ethic as Izzo. An attorney and entrepreneur, Jeff Ishbia is in his office by 6:30 a.m.
Mat Ishbia says his father taught him "You have to work for everything you get. Nobody gets handed anything."
When Mat started at United Wholesale, Ishbia's father told him he would not receive special treatment just because he was the boss' son. He started at the bottom and had to work his way up the ladder by proving himself, much the same way he had to at Michigan State. (He became CEO of the holding company in May and president of the wholesale operation in 2009.)
Another similarity between Izzo and Jeff Ishbia is the both act with integrity, Mat Ishbia says. He was a sales representative for United Wholesale during the subprime boom. The company did not offer option adjustable-rate mortgages and similar products and this hurt its volume as lenders ran a race to the bottom, lowering their standards to win loans.
But his father saw the pitfalls of those products, telling Mat that making the quick buck was not what he believed in and the company would do what is right. United Wholesale survived where others failed and it has thrived in the years since.
A true sportsman, Ishbia refuses to gloat about companies like Fifth Third Bank leaving the wholesale channel.
"I want to compete against the best. I don't want anyone to exit" wholesale, he says. "I want everyone to be in it. I don't have a problem if there is more competition. If their better than us, then they're better than us.
"I'll take my team against any anyone's team and with our work ethic, hopefully we'll surpass them. If not, we'll get them the next time."