United Wholesale Mortgage (UWM), the nation’s largest wholesale mortgage lender, announced on March 4, 2021, that it would no longer do business with mortgage brokers who also worked with Rocket Mortgage (the online loan shopping and application tool offered by Quicken Loans) or with Fairway Independent Mortgage Company, claiming that those two rival companies “are hurting the wholesale channel.” UWM’s “us or them” ultimatum sparked a furor and no shortage of angst among the voluminous group of brokers who had been dealing profitably with both UWM and at least one of those rivals to that point. Now, the ultimatum has led to a class action lawsuit against UWM.
A lawsuit filed on April 23 on behalf of a large group of independent mortgage brokers alleges that UWM’s edict is “unlawful” and “anticompetitive.” A statement released at the time of the suit’s filing asserts that “UWM’s leveraged ultimatum is clearly unlawful, unfair and is designed to use UWM’s dominant market share … to limit the consumers’ choice and steer business for their own gain.” The statement went on to note that “[t]his position also runs counter to the actual value provided by mortgage brokers — the ability to shop all lenders and select the company and loan program that provides their clients the best possible rate, experience, and process.”
The suit claims three separate violations of the federal Sherman Antitrust Act. One is for unreasonable restraint of trade. The second claim is that UWM’s action constitutes impermissible “steering” — an act intended to dissuade consumers or business partners from using a third party’s product or services— to an extent that harms competition and violates antitrust law. The third alleged violation is that UWM’s policy is an attempt to unlawfully monopolize the wholesale mortgage market.
In addition, the class action lawsuit asserts causes of action under Florida’s state antitrust laws and the Florida Deceptive and Unfair Trade Practices Act, as well as a state law claim for tortious interference. The suit requests that the court rule that UWM’s policy is unenforceable and seeks compensation for named plaintiffs and other class members for damages that they sustained as a result of the policy.
Rocket Mortgage announced in March that “22 of our 25 largest partners have rejected UWM’s ultimatum and have elected to continue working with our company.” A company spokesman said recently that over 9,000 brokers had rejected UWM in favor of continuing to work with Rocket. Both the Mortgage Bankers Association and the National Association of Mortgage Brokers have been critical of UWM’s action. Whether the widespread concern and disenchantment that the ultimatum produced will translate into a successful class action remains to be seen.
Non-fungible tokens (NFTs) have gotten a lot of media attention of late, with breathless reports of multi-million dollar purchases of items one might never have expected to command such staggering sums. The objects sold have included digital artworks (such as drawings, music, and short videos) and even an autographed tweet by Twitter’s founder. Talk of an NFT “gold rush” abounds and does not seem overstated at the moment. But perhaps just as intriguing and unsettled as this new marketplace are the many legal issues that it raises.
Special Purpose Acquisition Companies (SPACs) have been in such widespread use over the last year or two that an uptick in SPAC-related litigation appears inevitable. Indeed, the increase is already beginning. After a brief overview of SPACs, this article will identify some of the key litigation risk areas for these entities and the individuals who govern them.
If you thought Lehman Brothers Holdings Inc. (“LBHI”) was done suing lenders as a result of its settlements with RMBS trustees years ago, think again. LBHI recently filed a new wave of lawsuits against approximately 60 defendants, mostly mortgage brokers, in the bankruptcy proceedings currently pending in the U.S. Bankruptcy Court for the Southern District of New York, and more may still be to come. As it did with the nearly 190 mortgage originators that it sued in 2018 in the same bankruptcy proceedings (the “2018 Adversary Proceedings”), LBHI seeks the remedy of contractual indemnification, alleging breaches of representations and warranties at the time certain loans were sold or brokered.
We have 
Business interruption insurance claims keep coming, cutting across a broad array of industries. The entertainment and media sectors are certainly not immune from pandemic-related losses. Last month, ViacomCBS became the latest entertainment entity to file such a claim, suing its insurer, Great Divide Insurance Co., for breach of contract and breach of the implied covenant of good faith and fair dealing. In the suit, filed in the U.S. District Court for the Central District of California, ViacomCBS seeks damages and declaratory relief for what it alleges is the insurance company’s failure to cover losses on ViacomCBS’ Television Production Portfolio policy, which provides more than $55 million in production-related coverage of various types. The lawsuit cites losses related to canceled and delayed productions and live events, such as the Kids’ Choice Awards, which was delayed and ultimately aired virtually, as were many other productions during the early months of the pandemic. ViacomCBS accuses its insurer of interpreting the governing policy in “an overly narrow and wrongful manner” and refusing to acknowledge coverage for various losses while improperly limiting the coverage available for other losses. ViacomCBS also alleges that Great Divide has acted in a manner inconsistent with policy language and industry custom and practice by refusing to acknowledge that ViacomCBS is “entitled to a third annual period of coverage without modification of the policy wording or cancellation or reduction of any of the policy’s coverages, except rate revision, as necessary.” It asserts that the insurer has instead offered only to continue the policy if the parties agree to an addition of an exclusion applicable to losses relating to COVID-19.
As the pandemic began unfolding about a year ago, 
U.S. student loan borrowers owe approximately $1.7 trillion on their student loans. About 92% of that amount consists of federal student loans (debt owed to the U.S. government), with the remainder owed to a growing market of private lenders. Despite the fact that default rates have increased consistently since 2003, a substantial marketplace developed for student loan asset-backed securities (SLABS). That marketplace, and the world of student loans more generally, are now being buffeted by a confluence of factors creating great uncertainty about what the future holds. These factors include the prospect of forthcoming student loan legislation, continuing concerns about the effects of COVID-19 on the larger economy, and structural changes affecting securitizations and the underwriting of student loans.
One would think that, as we approach 2021, litigation related to residential mortgage loans originated and sold well over a decade ago would be ancient history. Nevertheless, some suits filed years ago remain active, and, even more surprisingly (and disturbingly), new lawsuits related to loans sold prior to 2008 may be on the way. Here is a look at the current RMBS (residential mortgage-backed securities)-related litigation landscape.
When mortgage-related litigation, including residential mortgage-backed securities (RMBS) lawsuits, erupted after the last financial crisis (the Great Recession of 2008), the litigants recognized that some of their disputes presented issues of “first impression.” That is, the parties’ arguments required judicial analysis and interpretation of contractual provisions and other issues that had not been litigated in a mortgage industry context. Even now, more than a decade later, some key issues remain subject to contradictory legal rulings or still lack definitive rulings from appellate courts.