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Top U.S. mortgage lender United Wholesale Mortgage (UWM) on Wednesday became the target of a lawsuit from the Ohio Attorney General, Dave Yost, who claims UWM conspired with mortgage brokers to steer loans and rip off consumers in Ohio.
The case seeks to hold UWM “accountable for orchestrating and executing a deliberate scheme to deceive thousands of Ohio homebuyers into paying millions of dollars in improper fees and excessive interest rates on their mortgages. This fraudulent scheme — and the Illicit enterprise that UWM has assembled to perpetrate it — undermines the fundamental structure and purpose of the wholesale mortgage market in Ohio,” the lawsuit states.
The lawsuit, filed in the Court of Common Pleas in Montgomery County, comes one year after a report from Hunterbrook Media indicated that UWM pressures brokers to send loans its way. Borrowers also sued the company last year over the same matters in Michigan, where UWM is based.
A spokesperson for UWM did not immediately reply to HousingWire‘s request for comment.
“Buying a home is hard enough without having to worry about a lender scheming behind your back,” Yost said in a statement. “This predatory business practice has no place in Ohio.”
Yost is referring to the claim that UWM colludes with many brokers to funnel nearly all loans back to itself while also claiming that these professionals are independent and search for the best deals from several wholesale lenders. As a result, UWM allegedly charges borrowers “above-market rates and fees,” and does not save them money, as it claims.
“Thousands of unsuspecting borrowers did not obtain any such ‘independent’ advice or representation,” the lawsuit states. “Rather, they were ensnared in UWM’s scheme, and steered, without their knowledge, to UWM’s higher-priced loans.”
Over the past three years, according to legal filing, UWM has issued nearly $605 million in mortgages in Ohio through brokers who refer 99% of their business to UWM.
In 2023, 50 Ohio brokers funneled 99% or more of their mortgages to UWM, with a total volume of at least $215 million. Meanwhile, nearly half of all UWM mortgages in Ohio were originated by brokers who referred 75% or more of their business to the firm in 2023, the suit claims.
Yost charges UWM with violations of Ohio’s Consumer Sales Practices Act, Residential Mortgage Lending Act and Corrupt Practices Act. He seeks compensation for affected consumers and civil penalties to the company.
