After a protracted fight, United Wholesale Mortgage (UWM) scored a courtroom victory this week when a Florida judge dismissed a 2021 antitrust case brought against the company by a Florida-based mortgage brokerage.
Spurred by UWM’s controversial “All In” initiative that prohibits its partner brokers from also doing business with competitors Rocket Mortgage and Fairway Independent Mortgage, the Okavage Group, headquartered in St. Augustine and licensed in 10 states, initially filed the class action lawsuit against the wholesale channel giant in April 2021.
The suit claimed that UWM and CEO Mat Ishbia coerced mortgage brokers into signing the ultimatum and agreeing to monetary penalties if the ultimatum was breached. Okavage claimed that the ultimatum unlawfully restricted competition and caused them financial harm, specifically citing various regulations including the Sherman Antitrust Act and the Florida Antitrust Act. Okavage also asserted that various brokers who supported UWM conspired to sign the ultimatum and effectively boycott Rocket and Fairway.
A federal magistrate judge in Florida indicated she saw differently in February, recommending that the lawsuit be dismissed for lack of evidence. Okavage’s suit, according to Judge Laura Lothman Lambert, was deficient in “factual allegations to plausibly allege the potential for genuine adverse effects on competition.”
On Monday, U.S. District Court Judge Wendy Berger agreed with Lothman, ordering the suit to be dismissed without prejudice. According to Berger’s court filing, “there are no factual allegations that the brokers were predisposed to concerted action toward a common improper goal, that the brokers were told that the change would only be made with majority agreement, or that a majority agreement was necessary to reach the desired result.
“There are only minimal allegations regarding pushback on dissenting brokers and no allegations that there was significant pressure applied between brokers to accept the agreement.”
It’s a long-awaited win for UWM, which has asserted over the past few years that the lawsuit was unfounded.
“UWM’s victory in this frivolous lawsuit reaffirms that the claims against us were baseless from the start,” said a UWM spokesperson through a statement. “As we’ve stated from the beginning, the ‘All In’ initiative benefits both the broker channel and consumers, which is evident in the increase in broker market share over the last few years.
“The accusations suggesting that ‘All In’ was harmful have always been false, and this court ruling further underscores that reality.” While the decision puts one courtroom challenge to bed, UWM isn’t out of legal hot water just yet. UWM and Ishbia are also facing a class action lawsuit filed by borrowers this past April. That suit accuses the mortgage titan of running afoul of both the Racketeer Influenced and Corrupt Organizations (RICO) Act and the Real Estate Settlement Procedures Act (RESPA), essentially alleging that UWM and aligned mortgage brokerages undertook a conspiracy to cheat borrowers out of billions in excess costs and fees.
