The attorney general of Ohio is suing United Wholesale Mortgage (UWM), claiming that the Michigan-based lender conspired with brokers to “rip off” consumers.
The complaint, filed Wednesday in an Ohio county common pleas court, alleges that UWM falsely represented that certain mortgage brokers were operating independently of UWM. The lawsuit claims that UWM colluded with the brokers to funnel loans back to UWM and then charged borrowers above-market rates and fees through the alleged scheme.
“Buying a home is hard enough without having to worry about a lender scheming behind your back,” Ohio Attorney General Dave Yost said in a statement released Thursday. “This predatory business practice has no place in Ohio.”
Yost’s lawsuit claims that from 2021 to 2023, UWM issued about $605 million in mortgages to Ohio residents, ostensibly through independent brokers. Those brokers directed 99% of their business back to UWM, the lawsuit alleges.
A spokesperson for UWM said in a statement provided to Scotsman Guide on Thursday that the company was blindsided by the attorney general’s accusations.
“We had no prior knowledge or warning of this lawsuit filed by the Ohio Attorney General, which is in and of itself suspicious,” the UWM statement noted. “It essentially repeats the frivolous allegations contained in a virtually identical lawsuit filed last year by a law firm that has a business arrangement with a hedge fund. In response to that lawsuit, we are seeking sanctions against the law firms that filed it and have moved to dismiss the claims.”
In April 2024, plaintiffs represented by the law firm Boies Schiller Flexner LLP filed a similar class action complaint that alleged UWM conspired with brokers to feed business to the wholesale lender. The same day the lawsuit was filed, Hunterbrook Media released a news analysis containing similar claims that UWM pressured brokers to “push deals its way.”
UWM subsequently filed a motion for sanctions against Boies Schiller, alleging that Hunterbrook shared advance details of the news analysis with the law firm. UWM also claimed that Hunterbrook and its affiliated investment arm engaged in a “coordinated attack” to smear UWM, and that the investment company shorted UWM stock prior to the release of the news analysis and profited when UWM’s stock price subsequently fell.
That lawsuit is ongoing.
In the Ohio case, the attorney general’s statement noted that the state is seeking “compensation for affected consumers, civil penalties and a court order requiring the company to comply with Ohio law.” The AG’s office is seeking civil penalties of $25,000 for “each unfair or deceptive act or practice.”
UWM’s response provided to Scotsman Guide called the Ohio attorney general’s lawsuit a “PR stunt,” stating that the company “will continue to defend these allegations to the fullest extent permitted by law.”
“UWM stands with the thousands of independent mortgage brokers who serve the unique needs of borrowers across the country,” the statement concluded.
