By KIMBERLEY HAAS
Leaders at United Wholesale Mortgage are doubling down on accusations that an explosive report released last week by Hunterbrook Media is inaccurate and tied to their main competitor, Rocket Mortgage.
Authors of the report, published on April 2, claimed that $39 billion in mortgages were referred to UWM by independent brokers who sent more than 99% of their business to the lender. They estimated that borrowers paid “between hundreds of millions and billions more in closing costs than people whose brokers found them typical loans.”
“Litigators and mortgage experts say UWM’s conduct could constitute fraud and run afoul of laws passed after 2008 to protect borrowers,” the report’s introduction said.
In a social media post published Tuesday morning on Facebook, Twitter, and LinkedIn, UWM leaders said the report “contains numerous lies, including there being something wrong with brokers choosing to send most of their business to a specific lender.”
“It is not uncommon nor illegal for a broker to send most or all their business to a specific lender. This is not unique to UWM brokers. Nor this industry,” the post said.
They went on to say that UWM is audited by multiple regulators and organizations every year including the Federal Housing Finance Agency, Fannie Mae, and Freddie Mac, with no findings to support what is presented in the Hunterbrook report.
UWM said the report has “obvious connections to Rocket Mortgage.” That claim was supported by the accusation that the author worked at a Rocket Mortgage affiliated broker for the last five years and was actively working on the report while employed there.
According to his bio, lead author Matthew Termine “is a lawyer with nearly five years of experience leading the legal team at a mortgage technology company.”
Sam Koppelman, Hunterbrook’s publisher, contributed to the report and he said in a statement on Tuesday that Termine didn’t work for Rocket.
“He worked for an independent mortgage broker that actually shopped between options. But it sounds like, in UWM’s telling, all brokers are just fronts for lender partners,” Koppelman said.
To our valued partners: pic.twitter.com/tvDXqWrqZs
— United Wholesale Mortgage (@UWMlending) April 9, 2024
A spokesperson for Rocket said last week that the company and founder Dan Gilbert have no relationship with Hunterbrook Media.
Koppelman posted online that Rocket and Gilbert did not even agree to provide them with comments. He repeated that on Tuesday, saying the report was based on facts.
“The data revealed that UWM had lied about the independence of its mortgage brokers — and the evidence led to a national class action lawsuit accusing UWM of engaging in a RICO conspiracy to commit ‘mail fraud’ and ‘wire fraud.’ After the publication of Hunterbrook Media’s article, two of the misleading UWM advertisements highlighted in it have disappeared from the company’s channels,” Koppelman said.
The lawsuit Koppelman referred to came about because Hunterbrook submitted its data analysis and research to the law firm Boies Schiller Flexner LLP. They agreed to help the firm explore a class action lawsuit.
UWM said in its social media post on Tuesday that if any of its partners get wrapped up in the lawsuit, they will cover the attorney’s fees.
“We have seen ‘ambulance chasing’ attorneys try to scare customers and brokers. We will be there to defend you,” the post said.
Hunterbrook is a start-up founded by Koppelman and investor Nathaniel Brooks Horwitz. It is is comprised of two entities: a hedge fund and a website that publishes reports based on publicly available data.
Hunterbrook Capital makes trades based on stories it uncovers through Hunterbrook Media.
Before the publication of the report, Hunterbrook disclosed placing a short position on UWM, headquartered in Pontiac, Michigan, and a long position on Rocket Mortgage, headquartered in Detroit.
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