composite wholesale mortgage (UWM) has proceeded to dismiss an amended counterclaim filed by BrokerShop America’s Moneyline (AML) who accuses the lender of antitrust practices Regarding the “ultimatum” put forward two years ago.
Thank you for reading this post, don't forget to subscribe!UWM’s motion to dismiss, filed April 19 in Michigan federal court, states that the dispute is not an antitrust case, as AML claims. Instead, it is about a broker who “repeatedly violated the terms of his agreement and is now grasping for any excuse to avoid liability.”
California-based AML filed an amended counterclaim on March 8, accusing UWM of violating antitrust laws, unfairly restricting trade, and attempting to monopolize the wholesale mortgage space with its “all in” initiative. Have done The document brings 12 antitrust counts, including claims related to Michigan, California, Florida and Texas statutes.
A spokesperson for UWM said the company had no comment. Representatives for AML have not responded to a request for comments.
The matter began in March 2021, when UWM CEO Matt Ishbia announced that the lender would no longer work with brokers it did business with. rocket hostage Or fairway independent mortgage, Any broker doing so will be fined.
In February 2022, UWM filed a lawsuit against AML, claiming it owed $2.8 million for breaching their revised agreement that imposed an ultimatum on the brokerage firm.
Days later, AML reverse-engineered the wholesale lender. A judge decided in December 2022 to dismiss the AML fraud and promissory estoppel claims. However, a declaration that the ultimatum violated antitrust law survived.
claims
To support its contradictory claims, AML, in its amended counterclaim, states that UWM has “dominance” and “market power” in the wholesale channel, with a current 54% share, compared to 34% in 2020, before the ultimatum. with.
Ishbia mentioned the stock during a call with analysts to comment on the company’s 2022 earnings. The executive said that UWM may not have 54% of the broker channel forever. However, it is “very realistic” that the company will hold an 11% overall share of the mortgage pie, a record high.
AML also claims that wholesale lending is a distinct submarket of the mortgage industry, with barriers to entry. It typically requires substantial resources and effort over many years for participants to enter and win in this market.
“The exit of many wholesale lenders from the market has also increased UWM’s dominance and market power,” the amended counterclaim states. The document cites companies such as Wells Fargo, which reduced its presence in the channel, and loandepot, A competitor that exits the wholesale space in 2022.
In response, UWM, in its motion to dismiss the amended counterclaim, stated that the ultimatum resulted from the fact that Rocket and Fairway have “eradicated” the broker channel by converting customers from wholesale lines to retail lines.
It added that brokers were free to accept or reject its amendment.
“AML alleges that it reluctantly agreed to the amendment and later terminated it. Now, it is facing legal action as it had closed several loans with Rocket in violation of the amendment, while It was, in effect, seeking to renegotiate its deal by insisting on the defective antitrust claims AML faces,” the UWM said in its motion.
AML’s claims are based, according to the lender, on the “legally untenable premise” that there is a separate wholesale mortgage lending market. However, “AML recognizes, from a consumer perspective, what is required is a mortgage, not specifically a wholesale or retail mortgage.”
According to UWM, the AML complaints are only related to its preferred business practices and loan volume. “But ‘antitrust law’ is designed to protect consumers from producers, not producers from each other or to ensure that one firm gets more business,” UWM says.
Other brokers are critical of the ultimatum — including some who signed the addendum — because it limits their ability to offer consumers the widest range of mortgage options, which is central to their mission. Ultimately, this prevents brokers and potential home buyers from getting the lowest prices and better quality products, he says.
AML was not the first broker shop to enter into a legal battle with UWM. In August 2021, a Florida mortgage broker named Dan O’Cavage filed a class-action lawsuit targeting Ultimatum on the grounds that it violates the Sherman Act. The arbitrator in this case was appointed on 12 April.
After suing AML, UWM sues California-based brokerage shop kevron investments inc. And Mid Valley Funding & Innov. ink, In February 2022. UWM requested $420,000 in damages.
