Allegations include forged e-signatures and fabricated income documents
United Wholesale Mortgage is suing a California broker over eight allegedly fraudulent loans that cost the lender nearly $700,000 in losses.
The Pontiac, Michigan-based wholesale lender has taken one of its broker partners to federal court, accusing her of forging borrower signatures, fabricating income documents, and submitting false loan applications that slipped past underwriting and landed on the books of Fannie Mae and Freddie Mac.
United Wholesale Mortgage filed suit against Suzanne Fillerup on December 17 in the United States District Court for the Eastern District of Michigan, seeking more than $697,988.50 in damages. The case centers on eight residential loans for properties across California, all closed between February and September 2021, with original principal amounts ranging from $240,000 to $620,000.
The trouble surfaced during periodic audits by the government-sponsored enterprises. Both Fannie Mae and Freddie Mac flagged discrepancies in the loan files and determined that the borrowers would not have qualified had accurate information been submitted. That triggered repurchase demands, forcing UWM to buy back the loans at full balance.
What the GSE audits uncovered, according to court filings, was striking. Freddie Mac's Fraud Investigation Unit traced electronic signatures on several applications to an IP address in Tustin, California, where Fillerup's office is located. The borrowers, investigators found, had not signed the documents themselves.
But the signature issues were only part of the picture. UWM says Fillerup submitted applications that misrepresented borrowers' employment status, omitted required tax documentation, and concealed existing mortgage debts. On one loan for a property in Citrus Heights, the lender claims self-employment documentation was backed by fraudulent tax returns, a fraudulent Bank of America account, and a fabricated gift letter meant to show the borrower had enough cash to close.
Several loan files also included falsified W-2s, doctored paystubs, and fabricated third-party processing fees on closing disclosures.
The fallout hit UWM's bottom line hard. Once repurchased, the tainted loans were no longer eligible for sale to any government-sponsored enterprise. UWM had no choice but to offload them on the scratch-and-dent market, where distressed-asset investors and nonbank servicers purchase defective loans at significant discounts.
The case highlights the risks wholesale lenders face when broker-submitted files contain defects. Under GSE guidelines, lenders remain on the hook for repurchases even when fraud originates with a third party.
UWM is pursuing a single claim of fraudulent misrepresentation and has requested a jury trial. Fillerup has not yet responded to the lawsuit, and no determination on the merits has been made.
