National Mortgage News and Mortgage Professional America (MPA) first reported the lawsuit.
Rocket claims the broker failed to disclose that the borrowers had taken out multiple mortgages United Wholesale Mortgage (UWM) in the days leading up to the closures, despite contractual obligations. UWM is not a party to the lawsuit and is not accused of any wrongdoing.
According to the lawsuit, Rocket financed three residential mortgages totaling more than $920,000 based on applications submitted by Sharp Loan. The company later discovered what it described as “misleading, untrue, fabricated, altered and otherwise fraudulent” information that understated or concealed borrowers’ debts.
Rocket said the undisclosed loans caused the mortgages to fall short of investor demands, forcing the lender to buy back the loans and resell them at a loss. The company is seeking damages of approximately $194,000, citing investor redemption demands, secondary market losses and related costs.
The lawsuit ultimately accuses Sharp Loan of breaching its brokerage agreement with Rocket, failing to reimburse the lender for losses and acting in bad faith.
“Broker, with the full knowledge, consent and active participation of Reyes, engaged in this conduct knowingly, intentionally and/or with specific and malicious intent to defraud Rocket Mortgage,” the complaint reads.
Rocket also filed a separate fraud claim against Reyes, alleging that he personally and knowingly participated in the submission of false information. “Reyes’ misrepresentations nearly caused Rocket Mortgage to suffer and continue to suffer harm,” the lawsuit said.
Reyes’s LinkedIn account lists him as director of sales for Sharp Loan. And under the self-reported employment history on his National mortgage system consumer access page, he is listed as president of the company.
Rocket is seeking monetary damages, interest, legal fees and additional damages, including exemplary damages in connection with the alleged fraud. The company said HousingWire that it had nothing to add beyond what is stated in the filing. Reyes and Sharp Loan did not respond to requests for comment.
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