Mat Ishbia built one of the largest mortgage-origination firms in the US. Some current and former employees say they encountered racial disparities, sexism and bullying there.
(Bloomberg) — Mat Ishbia, the billionaire who bought professional basketball’s Phoenix Suns in February, runs a mortgage company where former and current employees complain of racial disparities, sexual harassment and bullying by managers.
More than two dozen people who have worked at Ishbia’s United Wholesale Mortgage in recent years described a high-pressure locker-room environment at the company’s Pontiac, Michigan, offices. Several said some underwriting managers treated Black workers differently from White employees. Others said leering and sexually offensive remarks were common among sales staff. Most asked not to be named citing fear of reprisals.
Ishbia, who turned the company founded by his father into one of the largest originators of US mortgages, purchased a majority stake in the National Basketball Association franchise from Robert Sarver after the league found Sarver had engaged in racist and sexist behavior. The sale valued the team at $4 billion.
None of the current and former UWM workers said Ishbia himself used racial slurs or sexually harassed employees. But some said managers berated subordinates and openly made sexually suggestive remarks, contributing to what they described as a hostile workplace. Former employees also described repeated cocaine use among some sales staff as well as by executives and managers with influence over their careers.
Among those who encountered cocaine while working at UWM was Matt Hutchinson, who left the company in June 2021 after two and a half years, the last 15 months of which were spent working at home. He recalled attending a client event at a Topgolf location in Auburn Hills in December 2019, when he says a UWM manager invited him to do a bump of cocaine in front of an independent mortgage broker who worked with the company. “And I’m like, ‘there’s nothing I’d like to do less than sit in a car with you and do blow.’ We had never talked about doing any drug together. To just ask me casually in front of this broker like we had done it before that was crazy to me.”
In a written response, lawyers for the company said they could find no evidence Hutchinson ever complained about the alleged incident. “UWM does not tolerate cocaine or any drug use,” the lawyers wrote, providing a photo of an office entrance marked with the words “tobacco, drug and weapon free campus.” The lawyers also said the company doesn’t tolerate any race-based discrimination or sexual harassment. “UWM’s culture is built on mutual trust, respect and kindness,” they wrote, noting that the company was named to Fortune’s best workplaces for millennials list in 2020.
UWM Chief Marketing Officer Sarah DeCiantis said in a statement that any attempt to portray a negative culture is “false and misleading.” The company, she wrote, “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.”
Ishbia, a walk-on point guard for Michigan State University’s national championship basketball team in 2000, has written that he puts in 14-hour days as the company’s chief executive officer. Some former employees said he helped them jumpstart their careers, provided opportunities for large commissions and motivated them to believe in UWM’s mission.
For Ishbia, that mission was driven partly by a rivalry with mortgage company Rocket Cos., a Detroit-based firm founded by billionaire and fellow Michigan State graduate Dan Gilbert, who owns the NBA’s Cleveland Cavaliers. At Tony Robbins-style events, Ishbia, who’s worth $8.3 billion according to the Bloomberg Billionaires Index, told employees a David-and-Goliath story in which, through hard work and dedication, they would dominate the mortgage industry. UWM surpassed Rocket in the second-half of last year, providing more funding for mortgages than any other US lender, according to data compiled by Inside Mortgage Finance.
UWM’s Michigan office features a medical facility, a hair salon and a VIP break room with premium coffee reserved for high-performing teams. There’s also a gym and a basketball court. In a conference room festooned with 16 basketballs, including some signed by Michigan State coach Tom Izzo and former NBA star Magic Johnson, top executives talked with Bloomberg News in February about their own experiences at UWM.
“We’re not just a mortgage company,” said DeCiantis. “We’re part of making the American dream come true.” Chief Growth Officer Desmond Smith said that when he was chief customer officer at Fannie Mae, he would come to the UWM office and think, “Are we pumping in Vegas air to make people happy?” adding that most people have smiles on their faces. The company didn’t make Ishbia available for an interview for this story.
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Current and former UWM employees provide different accounts. Taryn Dover, a 35-year-old former underwriter and team leader who left UWM in November after what she viewed as a demotion, said she sometimes heard colleagues and managers discussing sex in the workplace. In one instance, she said, she heard a manager talk about bringing employees home with him to have sex. “So many people around me, they could say whatever they wanted,” Dover said.
Dover, a Black woman, said she reported concerns about interactions with her managers and how they perceived her to Team Member Services, the company’s human resources department, but nothing changed. She is one of five Black employees interviewed by Bloomberg who said managers held them to a different standard than White colleagues, part of a pattern that she called “passive-aggressive racism.” 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.”
UWM’s lawyers said the company couldn’t find any evidence that Dover had complained about inappropriate sexual remarks. They also said UWM has strict policies against discrimination in the workplace. The company said people of color make up about one-third of its workforce, but it didn’t provide any further breakdown or time frame.
Two other Black employees were threatened with termination after complaining about working conditions, and one of them was fired, according to a complaint filed with the National Labor Relations Board in 2021. The employees raised concerns about wages and hours, according to partially redacted filings obtained by Bloomberg, but UWM lawyers told the NLRB that the firing was for poor performance and “worsening negative attitude.”
After the NLRB found sufficient merit in the allegations that the company illegally threatened the workers for the case to proceed, UWM agreed in a November 2021 settlement to issue back pay to the fired employee and post a notice saying it wouldn’t retaliate against anyone who filed such complaints. UWM’s lawyers told Bloomberg the allegations, which the company denied, did not concern race and that the case was settled “to avoid the expense of litigating a dispute.”
More than half a dozen sales employees said they encountered drugs on campus. One recalled arriving at 7 a.m. one day in 2019 to find a manager using cocaine in the bathroom. Another recalled seeing two or more employees enter the same stall on a handful of occasions, before he stopped taking notice.
UWM’s lawyers said there are 667 cameras on the company’s campus, none of them in bathrooms, and that “security has not observed or encountered drug sales.” The lawyers also said there have been no complaints filed with the company’s human resources department concerning cocaine use on campus.
But during a five-week period in the fall of 2021, UWM security called local police twice to report cocaine found on campus, police records obtained by Bloomberg show. In one instance, an employee was terminated after dropping a “dime bag” in a stairwell, the documents show. In the other, a security guard found a bag of the drug in a bathroom. UWM’s lawyers said these were among “a few instances over the course of years where security identified the presence of drugs on campus and handled them appropriately.”
Former employees also said cocaine was present at parties hosted by executives at their homes and at casinos, restaurants and hotels in the Detroit area. Though these weren’t company events, some of those managers had the power to allocate accounts, several salespeople said. Some said they saw the gatherings as a way to get face time with decision-makers.
The UWM lawyers said the company has no role in private gatherings and can’t speak to the off-duty conduct of its employees. The parties that employees described to Bloomberg would have been “contrary to UWM’s values and not consistent with its culture,” the lawyers wrote.
Former employees said some managers went over the top in interpersonal communications. One said he was berated on three occasions between 2018 and 2020 by an executive who has worked at UWM for more than 20 years. The same executive last year told another former employee, a saleswoman in her 50s, that strong women come across as “bitches,” according to three people familiar with the incident. He repeated the slur twice more during their conversation, stopping only after the employee asked him to, two of the people said. UWM’s lawyers said the executive denied bullying anyone and the company doesn’t tolerate physical intimidation or threats.
One account executive said she was pushed out of her position last year after a manager told her she was not emotionally intelligent. The former employee sent a letter to Ishbia, seen by Bloomberg, detailing allegations of gender discrimination on the sales team, which she described as humiliating. In one instance, she wrote, a male colleague questioned if she was having her period. The company’s lawyers said UWM could not locate the email, but Ishbia sent a response, reviewed by Bloomberg, thanking the woman for reaching out, promising to dig into the matter and wishing her luck in the future.
Some employees recalled sales staff and managers commenting about the attractiveness of new employees whose photos were included in in-house emails. Others complained about a requirement to send videos to outside mortgage brokers, who are UWM’s customers. The videos, called USnaps, are intended to build collegial relationships. But more than half a dozen people said it was a loathsome task that sometimes led to unwanted comments about their looks and other unwelcome interactions. Some said they reported their discomfort to managers but that nothing came of the complaints. Others said they didn’t say anything.
UWM Chief Operating Officer Melinda Wilner said there are many ways to escalate a concern and that “it’s difficult for me to understand why someone would feel that they couldn’t.” The company’s lawyers said that UWM could not locate any documented complaints about broker misconduct related to USnaps in the past year or inappropriate comments directed at new hires.
Ishbia, who donated $32 million to his alma mater in 2020, keeps close with former teammates. In January 2019, he hired one of them, Mateen Cleaves, as a leadership development coach. Cleaves, an All-American who went on to play in the NBA, was awaiting trial in a sexual-assault case at the time.
Cleaves was acquitted later that year, but while his case was pending, some employees said his role at UWM — which included holding one-on-one meetings on the company’s campus — made them uncomfortable. They also said that a video shown during the trial and later broadcast on local TV disturbed them. It showed a naked Cleaves chasing a mostly naked woman through a motel parking lot. Cleaves’s lawyer said in court that the sex was consensual and that his client was trying to prevent the woman from walking around unclothed. “To be portrayed as a rapist, it broke my heart every day,” Cleaves said after the verdict. “But lying about rape is just as bad.”
UWM’s lawyers said Cleaves was presumed innocent at the time he was hired and that while he did hold one-on-one meetings before and after he was acquitted, employees could request a different leadership coach.
Another former basketball star has a role at UWM. In 2021, the company added Isiah Thomas, who’d played for the Detroit Pistons, as an independent director to its nine-member board, which includes Ishbia, his father, his brother and three company executives. In 2007, Thomas, then the coach of the New York Knicks, was found to have sexually harassed a former team executive who was then fired after complaining about unwanted approaches. Madison Square Garden, the owner of the Knicks, agreed to pay her $11.5 million in damages. UWM’s lawyers said Thomas “is an accomplished leader in business” and serves on the boards of other companies, including Madison Square Garden Entertainment. A spokeswoman for Thomas, who is also CEO of cannabis-growing company One World Products, didn’t comment.
Last year, as interest rates rose, the mortgage business took a beating. In April, when Rocket announced layoffs, Ishbia called the move “disgusting” in a LinkedIn post and promised never to have a layoff.
Despite the pledge, head count at UWM fell by about one-third to roughly 6,000 at the end of last year from 9,000 in June 2021, according to company filings. In the last quarter of 2022, the company posted its first loss since going public two years earlier. Adam Mendelsohn, a spokesman for UWM, said a mid-2021 return-to-office policy accounted for most of the headcount decrease.
Some of the people who left offered a different reason for their departures. Five former salesmen said UWM managers increased their focus on setting difficult daily targets after the mortgage market soured. That practice, known internally as “running plays,” seemed designed to make staffers miserable and sometimes preceded dismissals, the salesmen said. Chief People Officer Laura Lawson said in an interview that UWM doesn’t create targets so people can’t succeed. “We don’t set people up to fail,” she said.
Hutchinson, one of the salesmen, says he left feeling “spent and bitter — it’s a toxic environment.” Another salesman, Matthew Golden, who left in August, said doing so was like going through a bad divorce. “I was so on board,” said Golden, who spent more than four years at UWM. In some ways, the former salesman said, he has to give Ishbia credit. “The greatest finesse in the world is convincing people you care without having to care,” he said. “That high-level manipulation is very profitable.”
–With assistance from Ann Choi and Josh Eidelson.
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