Atlantic Trust Mortgage Corporation has outlined its defense against a lawsuit by United Wholesale Mortgage (UWM), the top wholesale lender in the nation. It is among the ever-growing list of broker partners who have run into trouble over UWM's ultimatum prohibiting working with other wholesalers.
Atlantic Trust Mortgage is being sued for allegedly violating the All-In Addendum (ultimatum) by submitting 71 mortgage loans to rival Rocket Pro TPO.
Although Atlantic Trust Mortgage has not responded to the complaint in court, President Scott Goldstein and Vice President Wade Swindell shared their side of the story on MortgageShots with Brian Stevens. The pair would not respond to NMP directly, saying on the advice of counsel, it should not comment further than what was expressed in the podcast.
Goldstein and Swindell said they sided with Rocket Pro TPO when UWM initially issued the ultimatum in 2021, primarily because they did not want a lender controlling their business and, therefore, terminated their partnership.
However, Goldstein said that in the years that followed, UWM account executives reached out to Atlantic Trust Mortgage multiple times via email to get them to reconsider the decision.
“They had been consistently reaching out to us for almost two years at that point, and our answer to them consistently was do we have to sign the addendum?” Swindell said. “They always came back and said yes … our response was always, well, things haven’t changed, and we’re not going to do business with you.”
The UWM complaint alleges Atlantic Trust Mortgage agreed to the ultimatum in December 2022. But that is not what Goldstein nor Swindell recall. Rather, Goldstein said that in December 2022, UWM Senior Vice President of Sales Allen Beydoun reached out to convince them to renew their partnership. After some back and forth, Goldstein said Beydoun offered a 60-day trial for Atlantic Trust Mortgage to work with UWM without having to sign the ultimatum.
Goldstein and Swindell said they were willing to do a trial if it meant Atlantic Trust could continue using both Rocket and UWM throughout the 60-day trial.
Afterward, Goldstein said UWM sent over a compensation level agreement, which did not include the ultimatum or any language stating they couldn’t work with Rocket during that time. Goldstein said they also received confirmation from an account executive saying that they have permission to continue working with Rocket throughout the 60-day trial. So Atlantic Trust Mortgage continued to send most of their loans to Rocket throughout 2023 and used UWM as needed.
Later in the year, Goldstein said he and Swindell were thinking of becoming correspondent lenders, and UWM repeatedly reached out asking if they’d like to be correspondent partners. Goldstein said they had considered partnering with either UWM or Rocket, engaging in discussions with both lenders. Ultimately, though, Goldstein said he and the leadership team at Atlantic Trust Mortgage agreed it was best to move forward with Rocket, so he sent a text to Beydoun notifying him of their decision.
Although Goldstein said Beydoun responded innocently, wishing them the best of luck in future business endeavors, two days later they received a lawsuit from UWM, demanding payment for $355,000 in liquidated damages for breaching the ultimatum contract. UWM did not return NMP's request for comment before publication.
“I would love to see the addendum they say we supposedly signed,” Swindell said. “I don’t know how they could hold us liable for a breach of contract for something we absolutely did not sign.”
Goldstein said they have not been officially served yet. However, they are reaching out to attorneys and speaking with Rocket’s counsel to figure out the best course of action moving forward.
“Obviously, they had this prepared well in advance because your attorneys aren’t going to be able to prepare that [lawsuit] that quickly,” Goldstein said.
Goldstein confirmed they are planning to speak with Rocket’s counsel soon, but Beydoun continued to evade communication with Goldstein after sending the lawsuit. Through a program called Bully Shield, Rocket covers penalties and court fees for brokers who want to get out of United Wholesale Mortgage’s ultimatum contract.
“And the fact that they are doing this to multiple companies throughout the nation, I just don’t understand how they can do that,” Goldstein added. “We’re a small company, we have families, we have people that we need to provide employment for, and they’re trying to take that away from us.”
Throughout 2023, Goldstein said that if UWM had an issue with them sending over loans to Rocket, thinking it was in breach of their agreement, they should have reached out ahead of time and did not. In fact, Goldstein claims they notified UWM repeatedly that they would still be working with Rocket
“It’s like they were waiting for the bill to escalate and grow, and then basically give us another ultimatum,” Goldstein said. “Either work with us or we’re going to sue you and here’s the bill you’re going to pay.”
