Loans

UWM slams investigative report, racketeering lawsuit



United Wholesale Mortgage Company is defending itself against explosive accusations in a media investigation and class-action lawsuit that the lender defrauded borrowers of billions of dollars.

this Hunter Brooke’s first reportA venture-backed media outlet claimed that UWM controlled independent brokers and charged borrowers hundreds of millions of dollars in fees. The publication’s editorial board said the wholesale giant faced the risk of widespread consequences and shared its findings with regulators and legal firms filing class-action lawsuits.

The lengthy article and its accompanying research noted that more than 8,000 independent mortgage brokers send 99 percent or more of their loans to UWM, a number that puts the company first in the industry. The lawsuit accuses “corrupt UWM loyalist” agents of violating their guidelines.Fiduciary duty to homebuyers part of racketeering charges against company New Michigan Lawsuit.

The report also compared UWM Net loss $70 million Last year, the company said it would pay $600 million in dividends in 2022 to Chief Executive Mat Ishbia and his relatives, who control a holding company that owns a majority stake in the company.

“UWM systematically and intentionally undermined the wholesale mortgage pipeline through deceptive conduct to enrich itself at the expense of ordinary Americans,” said attorney John Zach of Boies Schiller Flexner LLP. , for the benefit of senior executives, including Mr. Ishbia.” Hunterbrook said it shared its findings with law firms before publication.

The impostor appeared to restrain Hunter Brooke from questioning. UWM called the lawsuit a sham in a statement Wednesday afternoon and slammed Hunter Brooke’s Relationship with Hunterbrook CapitalThe lawsuit makes no mention of Hunter Brooke’s research or Hunter Brooke Capital.

A UWM spokesperson said in a statement: “Although the real party behind it was a hedge fund named Hunterbrook, the lawyers concealed the hedge fund’s involvement.” Hunterbrook’s business model is to manipulate the stock market by speculating on public information. Rich people who enrich themselves. “Funders are doing this at the expense of ordinary investors, many of whom are hard-working UWM employees.”

Hunterbrook Capital held a short position in $UWMC, a long position in $RKT, and purchased derivatives for an undisclosed amount.This entity represents Raised $100 million On Wednesday afternoon, reporters continued to update the story, sharing instances in which UWM removed marketing content reviewed by the story.

On Wednesday afternoon, Zucker, the attorney who filed the lawsuit, responded to UWM’s comments by saying the company did not attempt to address the issue of fraud in its statement.

This article was written by senior producers and legal and financial experts over a thousand hours and includes commentary on Home Mortgage Disclosure Act data.Hunterbrook also shared a website where consumers can check out Can see if they are being “ripped off” by their mortgage broker.

Investigation and litigation focus on UWM “Go all out” mission, has been the subject of multiple lawsuits from and against lenders. The so-called “ultimatum” prohibits brokers from working with Rocket Mortgage, Fairway Independent Mortgage Companyand prevents brokers from purchasing rates after UWM has locked them.

Of the 30,229 brokers who sent at least one loan to UWM last year, 12,936 (42%) sent more than 75% of their mortgages to the company, the report said. An additional 8,665 brokers send more than 99% of loans to UWM. Hunterbrook found that the percentage of fully committed brokers has increased since 2020, with 75% or more submitters accounting for 48% of UWM origination volume.

A review of HMDA data apparently shows that, controlling for rate and type, UWM loans pay an average of $865 more than the median cost of such loans from other lenders. Homebuyers who work with 99 percent or more of the “lead” brokers pay more than the average UWM loan cost thousands of dollars more than the median cost of loans generated by other brokers, the lawsuit alleges.

The lawsuit alleges that between 2021 and 2023, consumers overpaid fees totaling at least $400 million.

Hunterbrook acknowledged that its research was limited by the lack of tenant FICO scores and other changes such as lender credit reports in the HMDA data; it defended its reporting in a report. Its analysis details.

The report and lawsuit also target the company’s sponsored website, MortgageMatchup.com, describing the website as a proxy for loyalty and indicating that UWM does not disclose its support and endorsement of advertising, gifts and other perks for brokers.

The lawsuit seeks claimants who made mortgage payments to UWM from March 5, 2021 to the present, as well as brokers who forwarded 75% or more of their loans to UWM in at least five separate transactions with the giant.

Hunterbrook’s article also attributes an expletive-laden voicemail attacking rival Rocket Mortgage to Mat Ishbia, allegedly sent to Anthony Casa, the former president of the Association of Independent Mortgage Professionals. Casa is currently President and CEO of UMortgage and left AIME in 2020 lewd comments Refer to Ishbia and the spouse of the Rockets senior executive.

A federal judge recently ruled in favor of UWM in an “all-out” lawsuit and dismissed one lawsuit. Complaint from Moneyline USA The Pontiac, Miss.-based company posted a fourth-quarter net loss of $62.5 million but remained tied with Rocket as the industry’s top promoter.





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