Hello, LOs!
Well, you can't say they didn't warn ya. United Wholesale Mortgage last week followed through on their threat to sue mortgage broker partners that also originated loans with Rocket Pro TPO and Fairway Independent Mortgage.
The wholesale lender filed a $2.8 million lawsuit against America's MoneyLine, arguing that the Southern California-based broker shop knowingly and systematically violated the terms of its contract. UWM says America's MoneyLine wrote at least 560 loans to Rocket and Fairway after it signed the addendum, which stipulates a $5,000 penalty per loan (or $50,000, whichever sum is greater).
In its statement, America's MoneyLine doesn't deny sending loans to Rocket and Fairway. Its position is that UWM's addendum is illegal, and thus, unenforceable. They also say UWM's "All-In" initiative is anti-competitive and anti-American. America's MoneyLine says other broker shops will join them to fight UWM's "tyrannical" strategy.
For what it's worth, UWM says it is 100% confident the ultimatum passes legal muster and adds that if America's MoneyLine wanted to do business with Rocket and Fairway, they simply had to terminate their contract with UWM first. A contact's a contract, right?
Barring a quiet settlement, it looks like this one will be up for the courts to decide. Still, I am curious to hear what the LOs out there think about all this.
LOs – what do you think about this one? And more broadly, I'd like to hear what you've seen/heard since the ultimatum came into effect about 11 months ago. Email me anonymously at jkleimann@housingwire.com.
James Kleimann
Managing Editor, HousingWire
Thursday's edition of LendingLife incorrectly said that Woodstock withdrew its opposition to the merger between Old National and First Midwest. Woodstock withdrew its opposition to a merger between First Mid Bank & Trust, also accused of redlining, and Jefferson Bank & Trust.
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