AIME’s Dirty Laundry Gets Aired

Broker Trade Group Drama is Better

Katie Sweeney wants her money. The former AIME executive says the broker trade organization made 9 contractually required payments related to her departure in early 2024. But payments stopped when she joined 🚀 Rocket Mortgage, the arch-rival of AIME’s principal sponsor, UWM.

In its counterclaim, AIME argues that Sweeney isn’t owed the $$$ b/c she enriched herself to the tune of more than $900K during her time there, in violation of bylaws. AIME also claims Sweeney ran parallel “for-profit” entities—including BAB Management & Broker Action Coalition—to siphon off sponsorships, member data & the “Brokers Are Better” brand. 

In its counterclaim, AIME says it has been harmed “in excess of $75,000” for each major category of damages, including payments to Sweeney & lost vendor relationships. It also says she registered the “Brokers Are Better” trademark in her own name & maintained control of AIME’s website after leaving the organization, creating a “mechanism to divert internet traffic” to her own entities.

What’s On Tap – Sept. 19

• Broker Trade Group Drama is Better
• “I Am Sure That Jay Bray Hates My Fucking Guts”
• Accused of Racism, an Appraiser Rebuilds His Biz
• Quickies
• ARMchair Critics

AIME (Cont.)

Sweeney denies the claims & says it’s nothing more than a bullying tactic. In a statement to The Mortgage Scoop, she said she will “continue to fight 🥊 back against efforts to intimidate or discredit me. This is about standing up to legal bullies and ensuring that brokers & the communities they serve have fair & honest advocates on their side.”

Sweeney also drops a subtle hint at where things might be headed in this ugly legal dispute ⏭️ UWM has always maintained that AIME is a completely independent nonprofit organization & while it supports many of the same goals (i.e. growing the broker channel), AIME is not an arm 🪖 of UWM. They are just a sponsor. But Sweeney’s lawsuit notes that UWM’s head of marketing, Sarah DeCiantis, personally negotiated her exit from AIME, which calls into question how independent the group is from its largest sponsor. A UWM spokesperson declined to comment. 

A jury trial has been set for the spring & Sweeney is seeking at least $280,000 in what she says is contractually owed pay.

For a second, forget the drama between Sweeney, Rocket, AIME, UWM & the other drama that preceded it. Here’s where the rubber 🛞 really meets the road: If there are financial irregularities or fraud that has taken place at AIME over the years, that could potentially jeopardize the group’s tax status with the IRS. (Then again, there are like 20 IRS auditors left, so maybe not?)

AIME has done important work advocating for brokers over the years, but questions of its independence & financial controls could prove troublesome in the future. This is definitely one we’ll be following & sources tell The Scoop it’s only going to get more dramatic 🍿

ADVERTISE

“I Am Sure That Jay Bray Hates My Fucking Guts”

So says Mark McDonough, a real mortgage old-timer who co-founded Assumeloans. Why does the CEO of Mr. Cooper supposedly “hate” McDonough, a pugnacious grandpa with a thick Boston accent & an unusually strong interest in mortgage delinquency trends? 

Well, McDonough has carved out a niche executing assumable mortgages & he says Mr. Cooper—like several other big servicers—doesn’t want to play ball. So he often nudges them to fulfill their legal duties to allow these mortgage assumptions to happen. They don’t like that, he said.

When he set the business up, McDonough & his business partner figured that the mammoth 🦣loan servicers (Freedom, Pennymac, Mr. Cooper) would embrace having assumptions done because they’d be easy & they’d retain the loan servicing & make more money, “but they’re more heavily geared toward churning delinquency than allowing the assumptions,” he said. “I have 7 active assumptions right now that I’m working on. All of them are fighting w/ a loan servicer to take an application from the borrower, even though they’re obligated to by VA or FHA. They just don’t want to do it.” 

He said he regularly receives “hate mail” from different attorneys because of their approach to getting assumptions done on behalf of their clients. “We end up getting them done, but it’s through harassment. Jay Bray is the CEO at Mr. Cooper, I am sure he hates my fucking guts. I don’t care. Carolyn Johnson is one of the associate counselors, & she hates my guts.” 

McDonough added: “I’ve gone to everybody at VA, at FHA, and said, ‘What are you doing? Enforce this stuff!’ In my honest opinion—& maybe it’s a little paranoid—they’re not enforcing it b/c they don’t want to upset the servicers.”

We’ll be covering more on this topic, so if you’ve got experience w/ assumable mortgages, hit us up at james@themortgagescoop.com.

Accused of Racism, an Appraiser Rebuilds His Biz

For much of the Biden years, Shane Lanham was singled out as exemplifying the problem w/ appraisers in America. In a New York Times article published Aug. ‘22, Baltimore-based Lanham was accused by a Black couple—Nathan Connolly & Shani Mott— of providing a lowball refi appraisal ($472,000) on the basis of their race. The article detailed that a few months after his low-ball, the couple “whitewashed” their house & got a new appraisal that came in at $750K. The lender that subcontracted Lanham, loanDepot, settled the case, & the Biden administration went so far as to issue a statement of interest. It didn’t look good for Lanham.

But legally speaking, Lanham prevailed. The case against Lanham was dismissed earlier this year (as was his counterclaim), & the Biden-era PAVE initiative has been largely dismantled by the Trump administration. 

Lanham told The Scoop that he’s in the process of rebuilding his business, which fell by 2/3rds since the NYT story was published. Other appraisers in Baltimore also saw business slip due to volume, but not like Lanham did. “Three of my biggest clients stopped sending me work,” he said. 

In an interview, Lanham agreed that race is an issue that can’t be ignored in American society. There are people with implicit, explicit bias and straight-up racists in every profession. 

“But I find it hard to believe that there are appraisers out there that would basically risk everything that they’ve worked for and risk everything for the future to screw over a minority homeowner so they couldn’t get a lower rate on their mortgage or cash out some equity in their house,” he said.

Quickies

• I dunno about you guys, but I’m getting really excited for MBA Annual. And based on the attendee list, lenders & vendors are feeling much better than they were last year. Budgets appear to be increasing, sources told me. I’ve also already got my first party invite — Cenlar has invited me to the The Mob Museum🕴on Oct. 19 for 🍸 cocktails. What parties are you all hitting up?
• Union Home Mortgage’s Ravi Patel is ready to put LOs on blast for negligence. He said a local lender issued a veteran an approval a few months back that should never have been written b/c the veteran had collection accounts that caused his DTI to increase. The veteran went under contract & paid for a home inspection, escrow deposit & appraisal fee only to be told 1 week prior to closing he had to get a different loan product. “Now mind you, the Veteran will not qualify for an FHA mortgage either because this lender doesn’t know how to do their job upfront and doesn’t know guidelines,” Patel wrote. “The fact she is hiding behind an ‘underwriter’ reviewing the file & claiming she had no way of catching all this upfront is disappointing & just flat-out not true. Who you work with matters.” Click the link 👆️ to see the text exchange between prospective borrower & LO.
• When should a lender hire a coach? I asked Sam Abazari and he said it makes the most sense for companies with 50 to 100 LOs that are doing 2 loans a month because you can easily coach them to 4.
• Here’s a minor mortgage M&A deal: Michigan-based Credit Union ONE, w/ $1.7 billion in assets, has acquired Icon Mortgage. All employees will be retained.
• There were big layoffs at Bankrate this week. Does that perhaps suggest AI is already having a big impact on revenue at SEO businesses? If so, what does that mean for lead gen?
• Pennymac this week raised conforming home limits to $819K. My money is on Rocket being next…

ARMchair Critics

• 🏠 Selling homes to the rich is easy: Mock them!
• 😨 Scary vendor math: Fewer LOs = fewer seats = less revenue
• 👷 A major homebuilder is offering some pretty interesting buydowns
• 💍 They’re divorced. A 2% Mortgage rate is keeping them together
• 🎸 CCM doubles down on non-QM loans w/ $1B funding
• 🃏 Mortgage rates go wild following Fed rate cut & Powell remarks

SUBSCRIBE

🙏 If you like what you’re reading, tell a fellow mortgage junkie to sign up here.