(The Center Square) – Ohio Attorney General Dave Yost is taking action against a Michigan-based lender, he said Thursday.
The Republican filed a lawsuit against United Wholesale Mortgage, a company Yost alleges is ripping off consumers.
“Buying a home is hard enough without having to worry about a lender scheming behind your back,” Yost said in a news release from his office. “This predatory business practice has no place in Ohio.”
In the lawsuit, Yost says UWM falsely claims its brokers are independent of the company and work to get consumers the best deals from different lenders.
However, according to Yost, the company colludes with its brokers to funnel the loans back to the lending side of the business. The scheme lets UWM charge borrowers above-market rates and fees rather than saving them money.
“Thousands of unsuspecting borrowers did not obtain any such ‘independent’ advice or representation,” the lawsuit says. “Rather, they were ensnared in UWM’s scheme, and steered, without their knowledge, to UWM’s higher-priced loans.”
Between 2021 and 2023, UWM issued about $605 million in mortgages to Ohio residents “ostensibly through independent brokers,” Yost’s office said. The independent brokers directed 99% of their business back to UWM, including $215 million from 50 brokers in 2023, the lawsuit alleges.
Yost filed his lawsuit in Montgomery County Common Pleas Court. It alleges UWM violated Ohio’s Consumer Sales Practices Act, Residential Mortgage Lending Act and Corrupt Practices Act, among other consumer protection laws.
His lawsuit seeks compensation for consumers impacted by the alleged collusion, civil penalties against UWM and a court order directing the company to comply with state law.
A UWM spokesman told The Center Square the lawsuit surprised the company and called it a “PR stunt.”
“We had no prior knowledge or warning of this lawsuit filed by the Ohio Attorney General, which is in and of itself suspicious. It essentially repeats the frivolous allegations contained in a virtually identical lawsuit filed last year by a law firm that has a business arrangement with a hedge fund,” the spokesman wrote.
“In response to that lawsuit, we are seeking sanctions against the law firms that filed it, and have moved to dismiss the claims,” the spokesman added. “We will take similar actions against this PR stunt by the Ohio Attorney General, and will continue to defend these allegations to the fullest extent permitted by law. UWM stands with the thousands of independent mortgage brokers who serve the unique needs of borrowers across the country.”
The company’s stock price fluctuated on Thursday following this news. It was down over a point at noon. However, the stock was up 0.1% by 2:30 p.m. Eastern time.
Yost’s office urges those with consumer complaints about UWM to submit them via email at UWMOhioComplaints@bsfllp.com.
You can read the lawsuit here.
