Michigan Based United Wholesale Mortgage Faces Federal Lawsuit

Positioned as the top mortgage lender in the United States, UWM is now under legal scrutiny for one of its business practices. (Credits: United Wholesale Mortgage)

For individuals in the market for a new home or seeking to refinance, the journey often involves collaborating with an independent mortgage broker such as Frank Hempel.

“When you’re comparing rates online and see a range of options, we essentially have access to a similar array of rates from lenders within our network,” Hempel explained.

One prominent player in this arena is United Wholesale Mortgage (UWM).

UWM Logo (Credits: United Wholesale Mortgage)

“During the pandemic, UWM presented brokers with an ‘all-in’ agreement, essentially stating that in exchange for providing tools and support to enhance their business, brokers would be restricted from working with certain lenders, namely Rocket and Fairway,” Hempel elaborated.

In a lawsuit recently filed in federal court, UWM and its CEO face accusations of exerting undue pressure on brokers to steer clients toward UWM, potentially leading homebuyers into costly mortgage agreements.

The lawsuit, brought forth by borrowers from Tennessee, Florida, and North Carolina, seeks class-action status to represent borrowers across 27 states. (Credits: United Wholesale Mortgage)

“Some brokers may prefer using UWM exclusively because it simplifies their processes. However, our responsibility is to prioritize the best interests of our clients,” Hempel emphasized.

Offering advice to those engaging with mortgage brokers, Hempel suggests being proactive in questioning the choice of lender listed in agreements.

“If you notice UWM listed, inquire about the rationale behind that selection. Are there alternative lenders offering better terms? If so, why aren’t they being considered?” Hempel advised.

UWM Location (Credits: United Wholesale Mortgage)

In response to the lawsuit, UWM issued a statement to CBS News Detroit:

“The lawsuit filed this week is a sham. Although the real party behind it is a hedge fund named Hunterbrook, the lawyers concealed the hedge fund’s involvement.

Hunterbrook’s business model is to sensationalize public information to manipulate the stock market, thereby enriching their wealthy funders at the expense of regular investors, many of whom are hard-working UWM employees.

UWM will defend these allegations to the fullest extent permitted by law and stands with the thousands of independent mortgage brokers who serve the unique needs of borrowers across the country.”

Nate O'Hara
Nathan is a seasoned commerce writer with a passion for unraveling the intricacies of the business world and distilling them into engaging narratives. During his academic journey, he delved deep into subjects like economics, marketing, and entrepreneurship, honing his analytical skills and developing a keen understanding of market dynamics.