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Mortgage lenders in California filed a class action lawsuit against United Shore Financial Services LLC, alleging that the company wrongfully changed the commission structure on mortgages that were quickly paid off by borrowers, according to a report from Crains Detroit.
The lawsuit states that United Shore, which operates as United Wholesale Mortgage, was "withholding commissions or charged back commissions on loans that were paid off over 180 days."
According to Crains, UWM is strongly denying the allegations.
"UWM partners with over 11,000 independent mortgage brokers nationwide and the allegations brought on by a couple brokers will be vigorously defended as they hold no merit," said a UWM spokesperson in a statement to Crains. "UWM is the (No. 1) wholesale lender for six consecutive years with over 34% market share. The company has always and will always act in the best interest of borrowers, brokers and the entire broker channel."
According to the report, brokers who worked with UWM operated under a legal agreement that mandated UWM pay a commission to brokers after 180 days. However, the lawsuit states that in the spring, the company informed 100 California brokers, "that it was retroactively amending its contracts so that borrowers would be required to hold onto their loans for 365 days otherwise the brokers would need to return their commissions."
Click here to learn more about the lawsuit.