UWM Embattled on Multiple Fronts Over Treatment of Lenders, Employees

By DARIA BACHMANN

United Wholesale Mortgage is facing more public scrutiny as court battles — and backlash from brokers — mount.

The second-largest mortgage lender in the nation, UWM has come under criticism over how it treats both its employees and its customers.

UWM announced in April 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. 

Mortgage industry leaders called the ban “unethical and uncompetitive.” Bob Broeksmit, head of the Mortgage Bankers Association, said at the time, “MBA does not condone activities designed to thwart competition in the mortgage market and limit loan options available to borrowers.”

UWM, on the other hand, is committed to this strategy. It is pursuing legal action against America’s Moneyline, a mortgage broker based in Aliso Viejo, Calif.

While there have been “a few brokers” that have breached the rules, UWM said America’s Moneyline has acted egregiously, alleging the brokerage did so “knowingly and purposefully.”

“Following a conversation with them, they continued to submit loans to UWM and Rocket Mortgage,” the statement said. “Therefore, UWM is moving forward with legal action enforcing the penalties laid out and agreed to in the contract.”

Jason Vondrak of Prospect Home Finance blamed the layoffs of 50 employees at his California-based company on UWM and its CEO, Mat Ishbia.

Vondrak said when he decided to end his participation in the UWM exclusivity agreement, the massive lender took steps to punish his company by withholding outstanding payments and demanding early payoffs.

“This was one of the hardest decisions of my life, and my heart goes out to all of our team members and their families that this affected,” Vondrak wrote.

Soon after UWM put its policy into place, Okavage Group LLC, a Florida real estate broker filed a federal lawsuit against UWM and Ishbia.

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.”

Okavage Group LLC declined to comment on the pending case, but Robert Goodman, an attorney with Parrish and Goodman, who represents Okavage Group, said he recently filed an amended complaint in court.

“There were some technicalities that were amended, but the gist of it is still the same,” Goodman said in an interview. 

UWM filed a motion to dismiss the amended complaint, Goodman said, but the next court date hasn’t been set.

UWM did not respond to multiple requests for comment. 

Additionally, UWM was slapped with a lawsuit by previous employees alleging the company repeatedly forced them to perform tasks outside of regular working hours and cheated them out of overtime pay. 

The case, a class-action lawsuit, is still pending.

Noah Hurwitz of NachtLaw in Ann Arbor, Mich., the attorney of Annie Haberlein, a former account executive at UWM, and the only plaintiff publicly named in the lawsuit, declined to comment on the status of the case.

UWM is also under scrutiny from Michigan state and county health officials in response to multiple complaints about the company’s handling of COVID-19.

The Michigan Occupational Safety and Health Administration (MIOSHA) Director Bart Pickelman told The Mortgage Note his agency has received 50 complaints against UWM since Nov. 1, 2021.