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UWM Class Action; Fannie, Freddie Reform Adrift; & Caliber 😀

By December 16, 2020 No Comments

Why would brokers sue United Wholesale?

—> Before we go into the daily events impacting mortgage lending, it’s with a truly sad heart that industry titan Donald Frommeyer died Monday night due to complications of Covid 19. According to National Mortgage Professional, Don was diagnosed with Covid last week, and was admitted to the hospital on Wednesday, Dec. 9. He was put on a ventilator on Sunday, Dec. 13, but that action was unsuccessful in restoring his ability to breathe.

For the past four years, even while working full-time as a loan originator, Don served as the chairman of the Originator Connect Network, the NMP coverage states. He will be missed.

—> United Wholesale Mortgage is famous for spreading the love. This year alone, the lender provided $25 million in employee bonuses for reaching three-year goals set in 2017.

Now, some Grinches want to steal UWM’s Christmas. A recent class action lawsuit claims that UWM penalized brokers whose mortgages refinanced soon after closing. According to coverage on the suit, the brokers encourage borrowers not to refi, but that wasn’t enough for UWM, they say.

In the spring, the lawsuit says, UWM informed about 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 otherwise the brokers would need to return their commissions.”

While, at this point, the lawsuit will continue to add Plaintiffs, there are 3 specific brokers who are named:

  • Rishi Bhasin of First Plus Funding

  • Anne James of First Allied Financial Services

  • Nelson Otero of Reliance Mortgage Service

These three are citing invoices they say they received from UWM, and say that the mortgage lender insists they owe between about $10,000 and $77,000 in commissions from mortgage loans that were paid off early.

In a statement to Crains, UWM denied the allegations. “UWM partners with over 11,000 independent mortgage brokers nationwide and the allegations brought on by a couple [of] brokers will be vigorously defended as they hold no merit,” the UWM statement reads. “UWM is the (No. 1) wholesale lender for six consecutive years with over 34 percent market share. The company has always and will always act in the best interest of borrowers, brokers and the entire broker channel.”

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Fannie and Freddie reform is officially adrift

Efforts of FHFA director ark Calabria to rush the reform of Fannie Mae and Freddie Mac over the finish line by January 20 just lost a lot of steam.

In an interview with the WSJ, Treasury Secretary Steven Mnuchin said he is “unlikely” to move forward with raising private capital for the GSEs, a necessary step to move them out of conservatorship.

“By “unlikely,” we take Mnuchin to mean “no” to FHFA’s aggressive timetable,” said FHN Financial EVP Jim Vogel in an email to clients this morning.  Mnuchin “is focused on steps that would allow the companies to build capital to absorb future losses and eventually raise money from new, third-party investors. ‘The real issue is how do you get them out of conservatorship? “ he said in the WSJ. “You need to raise third-party capital and you need to retain capital. That’s, to me, the issue.”

Vogel added that there are two issues remaining to watch and see what happens: “With the Trump Administration – and possibly the free rein allowed Mark Calabria at FHFA – coming to an end, GSE headlines next year will depend on i) who will set housing policy in the new Administration (it doesn’t have to be Treasury); and ii) if Republicans control the Senate and the chairmanship of the Banking Committee.”So, it’s ultimately up to each employer to determine how to best tackle the vaccination of workers.

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Caliber provides six-month internships to the underserved

Recruiting fresh faces into the mortgage industry is truly a challenge for most of us, and Caliber Home Loans just announced a novel way to try to reach new talent.

First, Caliber announced its commitment to a three-year, $100,000 corporate sponsorship of Year Up, a national nonprofit. Year Up works with underserved young adults to give them the support necessary to reach their full potential and thrive in professional careers and higher education. Year Up has served more than 30,000 young adults across 35 campuses since its founding in 2000.

In addition to financial support, Caliber will partner with Year Up to provide six-month internships within the Company's Technology and Operations departments to help foster students' professional aspirations.

“Caliber is proud to partner with Year Up to help motivated young adults develop their career paths and create a lifetime of success. We are committed to providing mentorship, education and professional training to enable these individuals to reach their full potential,” said Sanjiv Das, CEO of Caliber Home Loans., in a statement.

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