The suit was filed by four borrowers following an explosive report by Hunterbrook Media in April. The venture capital-backed outlet claimed UWM holds independent brokers captive via its All-In Initiative and overcharges borrowers by preventing brokers from shopping around for clients. UWM has vehemently denied the accusations.

Subsequent litigation alleged UWM violated a number of laws including the Racketeer Influenced and Corrupt Organizations Act (RICO) and the Real Estate Settlement Procedures Act (RESPA).

In its motion to dismiss, the wholesale giant calls all of the allegations "meritless" and an attempt to "smear United Wholesale Mortgage, LLC ("UWM"), its affiliates, and even its CEO — all of which serves to benefit market speculators."

"This Hunterbrook-affiliated lawsuit is a putative class action that raises a kitchen-sink full of claims against UWM, its holding companies, and its CEO," the motion states.

It further picks apart all of the claims made against it.

The wholesale giant says the suit has failed to plead its racketeering claims, and does not demonstrate the existence of an enterprise engaging in a pattern of such activity. Further, UWM argues that RESPA claims are subject to a one-year statute of limitations and that the time period for all class representatives has expired, making the claim void.

Lastly, UWM points out that the plaintiffs' claims that it aided and abetted a breach of a broker's fiduciary duty fail because "mortgage brokers are not per se fiduciaries."

The attorney representing the plaintiffs did not immediately respond to a request for comment Monday. 

UWM argues that contrary to the lawsuit's statements, brokers use its services because they actually want to, not because they are being held captive. It points to its competitive rates and state-of-the-art technology, which makes for a reliable borrowing experience for customers as the reason why brokers opt to use its services.

It also states that while the complaint "tries to cast repeat business as something nefarious, it is an essential part of growing any business and the result of the unique value UWM provides — tireless customer service, cutting-edge technology, and unmatched speed and reliability," UWM's motion filed June 21 reads.

Additionally, the lender defended its ultimatum, adding that two federal courts in Florida and Michigan have thus far upheld its initiative, and its lock-in provision, which allows brokers to lock-in UWM's rates prior to closing.

The original complaint, lodged by law firm Boies Schiller Flexner LLP, relies heavily on the assertion that UWM's ultimatum has contributed to borrowers being deprived of cheaper loan options because brokers cannot freely shop around. UWM says this is not the case, as brokers are free to exit the wholesale agreement anytime following a seven day notice.

Regarding its lock-in provision, the wholesale lender says it's at-will, something a broker can opt for or forgo. 

Following Hunterbrook's investigation and the racketeering lawsuit, industry stakeholders expressed concerns over how the allegations may impact broader customer sentiment about the industry. 

Some have predicted the case could lead to more regulatory scrutiny of mortgage brokers, but that in the near-term the accusations alone will shake consumer confidence in home lenders and make borrowers reconsider working with mortgage brokers. 

Others have questioned what Hunterbrook's motives were in publishing such an investigation and asked whether it was ethical journalism. The parent company of Hunterbrook, prior to publishing the story, took a short position in $UWMC, a long position in $RKT, and purchased derivatives at undisclosed amounts.

Amid the unfolding litigation, UWM remains the dominant wholesale lender in the nation. 

The Detroit-area lender earned $108.5 million in the first quarter of 2024, compared with losses in the fourth quarter of $461 million and $138.6 million during the first quarter of 2023. Total volume of $27.6 billion included $22.1 billion in purchase loans.