Class action suit against UWM continues after judge denies motion to dismiss

UWM had filed a motion to dismiss the suit in June

Class action suit against UWM continues after judge denies motion to dismiss

UWM had filed a motion to dismiss the suit in June
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A class action lawsuit filed against United Wholesale Mortgage (UWM) on conspiracy grounds is set to continue after the wholesale mortgage giant’s motion to dismiss the suit was ruled moot by a Michigan judge.

A court can deny a motion as moot when circumstances change, causing the motion to become irrelevant. In this circumstance, UWM was sued in April by a group of borrowers who alleged that the company’s controversial “All-In” ultimatum is in violation of the Real Estate Settlement Procedures Act (RESPA), as well as the RICO Act, which is usually applied in cases dealing with organized crime. The plaintiffs claim that UWM conspired with brokers that complied with the ultimatum, steering borrowers toward loans with excessive costs and fees.

UWM originally filed the motion to dismiss in June, asserting that the suit is part of a coordinated effort to sully UWM and affiliated brokers to damage the standing of its public offerings. The company pointed to an exposé published by venture-backed Hunterbrook Media, released the same day that the suit was filed, as part and parcel of that coordinated effort.

The plaintiffs filed an amended complaint in August — which led Judge Brandy R. McMillion of the Eastern District of Michigan to issue a text-only order denying UWM’s motion to dismiss as moot. A text-only order appears just as an entry on the court docket, with no accompanying documents offering further background or explanation of the order.

Consequently, the class action suit remains a live one; if UWM still seeks to have the case dismissed, it must now file a new motion to do so. This roadblock for the wholesale lender is the latest development in a number of court cases relating to its “All-In” initiative. UWM recently picked up a courtroom victory in a separate suit when a judge dismissed an antitrust case levied by a Florida mortgage brokerage last month.

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