A Florida real estate broker filed a federal lawsuit against United Wholesale Mortgage’s parent company and CEO Mat Ishbia over the launching the Broker Wars, in which Ishbia forbade brokers from doing business with two competitors if it wanted to continue to work with UWM.
The lawsuit, filed in U.S. District Court in Jacksonville, alleges UWM issued its ultimatum “in a desperate attempt to stifle competition” and to “mitigate its acknowledged risk of losing market share.”
UWM announced in April that it would force brokers to sign an agreement that they will not work with Rocket Mortgage or Fairway Independent Mortgage – or else be banned from work with UWM, the largest wholesale mortgage lender.
Ishbia charged the two companies with “hurting the wholesale channel.” He accused Wisconsin-based Fairway Independent of “criticizing brokers … and not doing right by the broker channel,” while saying Detroit-based Rocket Mortgage is working with realtors to “circumvent brokers.”
UWM’s announcement came a little more than a month after Rocket announced a new national broker directory on its website – allowing homebuyers and homeowners seeking to refinance to find local independent mortgage brokers to guide them through the process. Part of Rocket Pro TPO, the directory is designed to deepen Rocket Mortgage’s partnership with the broker community.
The lawsuit, filed by the Okavage Group LLC, accuses UWM of engaging “in a contract, combination, or conspiracy in restraint of trade to jointly boycott Fairway Mortgage and Rocket Pro TPO to suppress competition in the relevant markets. The Addendum is a per se antitrust violation expressly inviting or engaging mortgage brokers to boycott Fairway Mortgage and Rocket Pro TPO and restrain competition. Defendants’ illegal scheme is pernicious, or manifestly anticompetitive, because, regardless of whether any broker agreed to the Ultimatum, it limits the choice of lending options available to brokers, and ultimately the loan options available to consumers, in the relevant market.”