United Wholesale Mortgage is suing close by rival Towne Mortgage in a uncommon theft of commerce secrets and techniques case from the trade’s largest lender.
The lawsuit filed in January accuses 9 former UWM account executives of taking commerce secrets and techniques, together with dealer accomplice data, to Towne. The competing retail and wholesale lender and servicer final month denied the allegations in a Michigan state court docket submitting.
While UWM like different giant companies is concerned in quite a few litigation, the corporate was not concerned within the wave of poaching instances between originators through the refinance growth. UWM says Towne tried to increase its wholesale presence by scooping up UWM expertise between final August and this previous January.
The Troy, Michigan-based Towne is an roughly 20-minute drive, or 10 miles from UWM’s sprawling Pontiac campus. While the agency is a fraction of the scale of the megalender, it is a aggressive participant, reporting almost $2 billion in mortgage originations and purchases in 2024, based on Home Mortgage Disclosure Act information compiled by Richey May.
Eight of 9 named particular person defendants seem to nonetheless work at Towne after making the change, based on the corporate’s web site. In a press release this week, a spokesperson for UWM mentioned the staff in query had consciously breached their employment agreements.
“Therefore, UWM has taken decisive authorized motion to carry Towne Mortgage and a choose variety of former UWM staff members accountable and to guard the onerous work and dedication of our staff,” the assertion mentioned.
Towne’s legal professional, and the skin counsel who filed the defendants’ response, did not return requests for remark.
UWM accuses Towne of a raiding marketing campaign
The lawsuit costs Towne with acquainted violations in different poaching fits, from breach of contract to tortious interference. The named defendants all had non-compete, non-solicitation and confidentiality agreements with UWM in impact for a 12 months after their departure; 4 of them had agreements lasting two years post-departure.
Former UWM AEs used their work e-mail accounts to ship to their private addresses confidential firm information, together with dealer accomplice compensation data, the lawsuit alleges. Towne denied the knowledge was proprietary and confidential, and mentioned a minimum of one of many defendants deleted the emails from his private account earlier than resigning from UWM.
The criticism additionally accuses one Towne govt, a former UWM divisional chief, of main the scheme. That worker, who shouldn’t be a named defendant, allegedly aided AEs to solicit dealer companions for Towne earlier than they resigned from UWM. Towne denied that accusation, stating the manager hadn’t labored at UWM for 10 years, and had labored at 4 different corporations since, suggesting his data of UWM was outdated and restricted at finest.
While UWM states counsel for the edges met in November 2024 to debate the employment agreements, Towne mentioned UWM by no means supplied any paperwork.
Without offering further particulars, Towne listed quite a few defenses, amongst them that UWM did not pay workers wages underneath state and federal regulation, and that the claims may very well be topic to arbitration.
The trade chief, which repeatedly generates tens of billions of {dollars} in mortgage quantity every quarter, is embroiled in federal lawsuits on subjects together with its retirement financial savings plan, its lending practices, and its “All-In” mandate for brokers.
