UWM wins antitrust case against Okavage Group

America’s Best Mortgage Lender United Wholesale Mortgage (UWM) this week won a three-year legal battle with a mortgage brokerage firm. The case involves the lender’s controversial “All-In” initiative, which states that brokers working with UWM cannot do business with competitors. Rocket Mortgage AND Fairway Independent Mortgage Corp.

On Monday, U.S. District Court Judge Wendy W. Berger ordered the dismissal without prejudice of a supplemental class action lawsuit filed by the Florida-based company Okavage Group and ordered all pending motions to be terminated. Berger was responding to Okavage’s objections following federal Judge Laura Lambert’s February ruling to dismiss the case, which cited insufficient evidence to prove the allegations against the lender.

Okavage, a sole proprietorship mortgage brokerage firm, alleged that UWM violated the Sherman Antitrust Act and the Florida Antitrust Act by forcing its brokerage partners to sign an amendment stating that they would not make loans to named competitors. The brokerage firm, which refused, accused UWM of monopolizing the wholesale mortgage market.

According to Okavage, when UWM forced Fairway and Rocket to boycott, it raised the costs of lending and mortgage operations to artificially high, uncompetitive levels. Fairway has since decided to exit the wholesale channel.

In her decision, Berger dismissed the claims, saying the plaintiffs had failed to show that the ultimatum constituted an “invitation to collusion” or that it was contrary to the brokers’ interests. She added that the broker also failed to show the lender’s market power or barriers to entry into the wholesale market, which would have driven up prices and costs.

“There is no factual allegation that the brokers were induced to act in concert to achieve a common, improper purpose, that the brokers were informed that the change would be implemented only with majority consent, or that majority consent was necessary to achieve the desired result,” Berger wrote in court papers filed in United States District Court for the Middle District of Florida.

“There are only minimal allegations of resistance to dissenting brokers and no allegations that there was significant pressure among brokers to accept the deal.”

In a statement sent to HousingWireA UWM spokesman said that the company’s “victory in this frivolous lawsuit confirms that the claims against us were meritless from the outset. … Accusations suggesting that All In was harmful have always been false, and the court’s ruling further underscores that reality.”

Attorneys for Okavage Group did not immediately respond to a request for comment.

UWM has been hit with federal antitrust claims and has also sued lenders for breaching their agreements by doing business with Rocket and Fairway. Most recently, UWM sued Atlantic Trust Mortgage Corp. for selling loans to rivals Rocket and Fairway, even though they agreed to the contract. The Florida-based company asked a federal court in Michigan to dismiss the case.

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