United Wholesale Mortgage is asking a Michigan federal court to dismiss a class action lawsuit that accuses the company of conspiring with brokers to orchestrate a scheme to defraud borrowers of “billions of dollars in excessive fees and costs.”
This lawsuit is
The subsequent lawsuit alleged that UWM violated several laws, including the Racketeer Independent Criminal Offenders Act (RICO) and the Real Estate Settlement Procedures Act (RESPA).
In its motion to dismiss, the wholesale giant argues that all of the allegations are “baseless” and “an attempt to smear United Wholesale Mortgage LLC (“UWM”), its affiliates and even its CEO, all to benefit market speculators.”
“This Hunter Brook-related lawsuit is a class action asserting any and all claims against UWM, its parent company and its CEO,” the motion states.
Additionally, we thoroughly analyze all the claims made against it.
The wholesale giant says the lawsuit fails to allege organized crime or prove the existence of a company engaging in such a pattern of activity. Additionally, UWM argues that the claims are invalid because there is a one-year statute of limitations on RESPA claims and the limitations period for all class representatives has expired.
Finally, UWM points out that plaintiffs' claim that they aided and abetted brokers' breaches of fiduciary duty fails because “mortgage brokers are not primarily fiduciaries.”
Attorneys for the plaintiffs did not immediately respond to requests for comment Monday.
UWM argues that contrary to the lawsuit's statements, brokers use its services because they actually want to, not because they are bound by them. The company cites competitive rates and cutting-edge technology as reasons brokers use its services, which it says translate to a reliable borrowing experience for customers.
The complaint, filed June 21, also states that while the lawsuit “attempts to portray repeat business as something negative, repeat business is a critical component of any business's growth and is the result of the unique value UWM provides: relentless customer service, cutting-edge technology and unmatched speed and reliability.”
Moreover, lenders defended the ultimatum,
The original complaint, filed by law firm Boies Schiller Flexner LLP, relies heavily on the argument that UWM's ultimatum prevented borrowers from taking advantage of cheaper loan options because brokers were not free to comparison shop.UWM says this is not true because brokers are free to walk away from wholesale agreements at any time after seven days' notice.
As for the lock-in clause, wholesale lenders say it is at the broker's discretion to choose or waive it.
Following the Hunter Brook investigation and fraud lawsuit, industry insiders
This incident
Some have questioned what Hunter Brook's motives were for publishing this investigative article and whether it was ethical journalism. Prior to publishing the article, Hunter Brook's parent company took a short position in $UWMC and a long position in $RKT, purchasing derivatives for an undisclosed amount.
As the litigation continues, UWM remains the nation's largest wholesale lender.
Detroit Area Lenders
