Nearly three years have passed since United Wholesale Mortgage (UWM) issued an ultimatum to its broker partners, making it clear that they must choose between UWM and competitors Rocket Mortgage or Fairway Independent Mortgage. UWM has now taken more legal action to enforce this directive.
The complaint alleges that Atlantic Trust submitted at least 71 mortgages equating to at least $355,000 in liquidated damages to Rocket or Fairway in violation of that agreement. It goes onto say if they wanted to do business with those companies then it could have sent a written notice of termination to UWM. The agreement stipulated that if Atlantic Trust wished to work with these competitors, they needed to formally terminate their relationship with UWM.
"This decision was made by UWM knowing it may result in ending relationships with existing Broker Partners, but it was necessary to protect the long-term viability of the wholesale mortgage channel," the complaint states.
Atlantic Trust said it does not comment on pending litigation.
Another similar case filed in December 2023 involves Madison Atrina LLC, which operates as District Lending, an Arizona-based broker with seven loan officers. Accused of sending at least 84 loans potentially resulting in $420,000 in damages to UWM's rivals, District Lending has not yet responded in court.
Both lawsuits seek compensatory damages, attorney fees, court costs, and other expenses.
In March 2021, UWM's CEO, Mat Ishbia, launched the "All In" initiative, urging brokers to cease dealings with Rocket and Fairway, claiming these lenders hindered broker growth. Brokers agreeing to the initiative by signing the contracts to send loans to UWM would exclusively work with UWM.
"As we've said from the beginning, All-In was put into place to help protect independent mortgage brokers and consumers across the country, and it has been a massive success," a UWM spokesperson Nicole Roberts said. "We have over 11,000 broker partners who are All-In with UWM and we continue to grow the wholesale channel by educating consumers across America on how to get a faster, easier and cheaper mortgage. Unfortunately, Atlantic Trust Mortgage is one of the companies who signed a contract and then knowingly breached it, therefore we will follow the agreed upon contract and win damages."
Roberts said Atlantic Trust is "one of very few companies we have found that has knowingly breached the contract." She added that they would continue to enforce the initiative.
UWM previously sued America’s MoneyLine in February 2022 for contract breaches by working with Rocket and Fairway, with these cases still ongoing. In June 2023, UWM settled a lawsuit with Mid Valley Funding, another broker that had been involved in a legal dispute over the All-In Initiative.
Mid Valley Funding agreed to pay $40,000 to settle the lawsuit, according to a UWM spokesperson. The nation’s largest lender had sought $310,000 in damages, as well as other compensatory damages, attorney fees, court costs, and other expenses.
