By KIMBERLEY HAAS
A Florida mortgage broker challenging United Wholesale Mortgage’s ultimatum agreement wants to include recent disclosures and statements related to the company’s successes to help prove his antitrust claims.
Daniel Okavage of The Okavage Group in St. Augustine is pursuing a federal class-action suit on behalf of all mortgage brokers that work, or have worked, with UWM and sustained damages after the company’s CEO, Mat Ishbia, announced in March of 2021 they could no longer simultaneously do business with Rocket Pro TPO or Fairway Independent Mortgage.
Okavage’s attorney, Robert Goodman, says thousands of brokers were cut off from opportunities to refer customers to the mortgage lender of their choice, resulting in business losses.
Lawyers for UWM have moved to dismiss the case, claiming their share of the market is too small to create a dangerous probability of monopoly power. Goodman says in court paperwork filed on Friday that UWM now has control of more than half the wholesale market.
“Data from the fourth quarter of 2022 indicates that UWM is the largest wholesale mortgage lender, with a most recent approximate 54% share of the wholesale market. This share increased from 34% in 2020. UWM boasts that it has over 12,000 mortgage brokers under contract with it. This represents significantly more than 60% of the wholesale mortgage brokers in the United States,” Goodman said.
Goodman said Ishbia has directly linked UWM’s growth with the ultimatum agreement and refers to the company as dominant in the wholesale market.
“UWM was able to force more than 9,000 brokers to agree to refuse to deal with Rocket Pro TPO and Fairway when they had previously often chosen to use those mortgage lenders because of their competitive price quality and service. This reflects UWM’s market power,” Goodman said.
Goodman has asked for a court order declaring the addendum unlawful and unenforceable as well as for actual, treble, and punitive damages.
Leaders at Rocket Pro TPO have fought back against the ultimatum.
Last month, the executive vice president of Rocket Pro TPO told brokers across the country they are willing to indemnify those who choose to fight UWM’s anti-competition ultimatum.
During a live-streamed Ignite Live event, Mike Fawaz said he believes the ultimatum was one of the worst things to happen to independent mortgage brokers in 50 years.
“The ultimatum uses lawyers and contracts to limit choice – both for the broker and for the clients the broker services,” Fawaz said. “There’s no other way to put it – the ultimatum is immoral, reduces broker incomes, and increases the rates the clients of brokers will pay.”
During an interview with The Mortgage Note, Fawaz said anyone who might benefit from their help can call Rocket Pro TPO for guidance.
In a Q4 and FY 2022 results release for UWM Holdings Corporation, Ishbia said 2022 was a historic year for UWM.
“Becoming the #1 overall mortgage lender in America, while originating mortgage loans exclusively through the wholesale channel, is a validation of our unrelenting commitment to the broker channel. We also delivered earnings of $931.9 million and have continued to reward our shareholders with consistent dividends. In 2023, we will continue to invest in technology to serve the broker channel and products that put brokers in a position to win. As we have done in other purchase-centric markets, we’ll grow market share and emerge stronger to better capitalize on the next boom,” Ishbia said in a statement.
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