A lawsuit against the “All-In” initiative in United Wholesale Mortgage (UWM) should be dismissed, a federal judge said, citing insufficient evidence to prove the allegations against the lender.
Based in Florida Okavage Group sued UWM in April 2021, following the lender’s announcement of an ultimatum that the wholesale lender will no longer partner with brokers who also work with rocket mortgage either Fairway Independent Mortgage Corporation.
Okavage refused to sign an addendum stating that brokers cannot do business with Fairway or Rocket. UWM terminated its contract with the broker and is no longer accepting mortgage applications from Okavage clients.
The single-member LLC and mortgage broker accused UWM of violating the Sherman Act and Florida Antitrust Law, as well as monopolizing the wholesale mortgage market as a result of the lender’s ultimatum.
Okavage Group had asked the court to declare the ultimatum illegal under federal and Florida antitrust laws.
Okavage Group asserted that UWM’s coercion of a boycott against Fairway and Rocket has had “the effect of increasing the costs of mortgage lending and has increased plaintiff’s cost of operations… to an artificially high and non-competitive level.” , according to a court file. before the United States District Court for the Middle District of Florida.
But federal Judge Laura Lothman Lambert wrote in a brief Tuesday that Okavage “provides no underlying facts … to support his conclusion that the ultimatum has increased the costs of mortgage loans, nor does he specify whether the cost of all loans mortgages has increased.” increased, or only those from the wholesale market.”
The filing also noted that while Okavage alleges that brokers who decided to work with UWM were unable to apply for mortgages from Rocket or Fairway, there are no facts indicating the actual effects of the action on the market as a whole.
Furthermore, despite Okavage’s claim that a “elimination” of Rocket and Fairway “significantly reduced competition in the relevant market,” there is nothing in the factual claim that Rocket and Fairway were ever eliminated or that they no longer They participate in the wholesale mortgage market. , the judge wrote.
It is unclear whether the judge took into consideration Fairway’s recent decision to abandon the wholesale channel. Earlier this month, Fairway, the nation’s ninth-largest mortgage originator, announced a full business pivot into retail lending.
The judge also noted an insufficient link between the ultimatum and harm to competition within the mortgage market generally, or to the wholesale mortgage market.
“We are not surprised by the trial judge’s decision and know his recommendation is accurate,” a UWM spokesperson said.
Okavage Group did not respond to requests for comment. You have 14 days to submit written objections to the conclusions and recommendations proposed in the report.
Since UWM announced its controversial “All-In” initiative in March 2021, the lender has been hit by federal antitrust lawsuits and has also sued other lenders for violating their contracts by doing business with Rocket and Fairway.
More recently, the UWM sued Atlantic Trust Mortgage Corp. for selling loans to rivals Rocket and Fairway despite having agreed to the contract.