Mortgage News February 14, 2023
In an initiative called “The Bully Shield”, Rocket Pro TPO announced Monday for any brokers who want to get out of United Wholesale Mortgage’s ultimatum contract that it will cover the ultimatum penalties as well as the court fees.
Issued in March 2021, UWM’s ultimatum stipulates that its broker partners are not allowed to do business with Rocket Mortgage and Fairway Independent Mortgage Corp. Failure to sign the ultimatum would lead to a termination of ties with UWM. A broker who signs the ultimatum must obey the rule or pay significant damages for such a breach— either $50,000 as liquidated damage or $5,000 per loan closed with Rocket or Fairway, whichever sum is greater.
For allegedly not complying with its contract, the companies Mid Valley Funding & Investments, Kevron Investments, and American Moneyline were also sued by the UWM. Among the liquidated damages claimed by UWM are $2.8 million from America’s Moneyline, $310,000 from Mid Valley Funding, and $110,000 from Kevron Investments.
According to Fawaz, any broker who wants to terminate the contract can access Rocket for support, no matter what the cost. After that, the broker does not have to do business with Rocket or Fairway, nor do they have to pay any money. Afterward, brokers can work with any lender they choose.
Any broker seeking Rocket’s assistance with legal fees related to the ultimatum should simply contact Rocket.
Fawaz said he’s not worried about UWM taking retaliatory measures, such as filing a lawsuit or increasing penalty levels.
UWM’s ultimatum is still being debated over its legality. According to UWM’s motion to dismiss parts of American Moneyline’s countersuit, Judge Laurie Michelson granted UWM’s motion to dismiss last month, but UWM’s declaration that the ultimatum violated antitrust laws survived.
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