United Wholesale Mortgage Clawback of Commissions Class Action

Mortgage brokers earn commissions when their customers take loans with mortgage companies with which they have contracts. The contracts spell out the terms of these commissions. In this class action, a number of brokers, both individuals and companies, bring suit against United Shore Financial Services, LLC, which does business as United Wholesale Mortgage (UWM), for breaking its contracts. The complaint alleges that UWM significantly changed the length of time for which customers must hold mortgages in order for the broker to earn a commission and then applied the terms retroactively.

The class for this action is all brokers who had a Wholesale Lending Agreement (or a similar agreement) and whose commissions were withheld or who were billed for commissions on loans that were paid off over 180 days after UWM funded them.

The brokers who bring this suit hold agreements with UWM that say that say that they will earn commissions for customers they bring to UWM who enter into mortgages. However, the agreements say, if a customer pays off the mortgage loan within 180 days, the broker must return the commission. The brokers, the complaint says, found customers for UWM’s mortgages and encouraged them not to refinance for at least 180 days.

According to the complaint, UWM began to experience financial difficulties in spring 2020. Because of this, the complaint alleges, UWM “informed approximately 100 brokers in California that it was retroactively amending its contracts so that borrowers would be required to hold onto their loans for 365 days[, or] the brokers would need to return their commissions.”

This apparently referred to mortgages already entered into before UWM’s announcement, since UWM “started sending out invoices to these brokers for the return of commissions from mortgages they had issued prior to UWM’s announcement…”

In addition to this, the complaint claims, “UWM has been withholding commissions to offset commissions from mortgages that the brokers had issued prior to UWM’s announcement and which had been entered within 180 to 365 days after inception.”

UWM did have the right to amend the agreements if it gave notice, the complaint says. Assent to such changes, the agreement says, will be signaled by the submission of any mortgage loan application after the amendment is posted, “without further signature or consent of any kind.” It further says that amendments will apply to “pending, and/or future” applications. However, UWM is trying to make the changes apply to all the mortgage loans that closed in the previous year.

Article Type: Lawsuit
Topic: Accounting and Charges

Most Recent Case Event

United Wholesale Mortgage Clawback of Commissions Complaint

December 11, 2020

Mortgage brokers earn commissions when their customers take loans with mortgage companies with which they have contracts. The contracts spell out the terms of these commissions. In this class action, a number of brokers, both individuals and companies, bring suit against United Shore Financial Services, LLC, which does business as United Wholesale Mortgage (UWM), for breaking its contracts. The complaint alleges that UWM significantly changed the length of time for which customers must hold mortgages in order for the broker to earn a commission and then applied the terms retroactively.

United Wholesale Mortgage Clawback of Commissions Complaint

Case Event History

United Wholesale Mortgage Clawback of Commissions Complaint

December 11, 2020

Mortgage brokers earn commissions when their customers take loans with mortgage companies with which they have contracts. The contracts spell out the terms of these commissions. In this class action, a number of brokers, both individuals and companies, bring suit against United Shore Financial Services, LLC, which does business as United Wholesale Mortgage (UWM), for breaking its contracts. The complaint alleges that UWM significantly changed the length of time for which customers must hold mortgages in order for the broker to earn a commission and then applied the terms retroactively.

United Wholesale Mortgage Clawback of Commissions Complaint
Tags: Unfair or Unlawful Clawbacks of Commissions