PRESS RELEASE
Mortgage Law Update from MortgageDaily.com
DALLAS — (June 25, 2007) As one bank sued another over nearly 80 employees who jumped ship to go to work for the defendant, a subprime lender moved through the litigation process on multiple fronts, according to https://www.mortgagedaily.com — the dominant source of online news for the mortgage industry.
Resource Bank’s lawsuit against Monarch Bank alleges two top executives breached their non-solicitation agreement then conspired “to cause the majority of the mortgage division to resign and move on over to Monarch,” an attorney for Resource told MortgageDaily.com.
But there was no conspiracy, a Monarch executive explained to MortgageDaily.com. “People can work where they want to work.” (https://www.mortgagedaily.com/LawsuitResourceBank062107.asp)
NovaStar Financial Inc. agreed to pay $5.1 million to resolve claims from 1,600 homeowners who say they were charged higher interest rates because their mortgage brokers allegedly did not disclose yield spread premiums.
The subprime lender settled the case to avoid further legal costs and to allow it to move forward, a NovaStar spokesman told MortgageDaily.com. He noted the company appropriately did disclose the YSPs to the borrowers — who would have paid the brokers more fees without them.
NovaStar Home Mortgage and two other defendants are awaiting a California state judge’s determination whether to triple damages in a recent jury decision against them.
In the case, a jury found that NovaStar and the other two lenders were guilty of false advertising and antirust violations on Bankrate.com and hit them with a $15.9 million verdict. Bankrate settled out of the case for $3 million.
The plaintiff in the case claimed the trio used “bait-and-switch” advertisements and then conspired to get it kicked off the site after complaints were lodged about the alleged tactics.
Two NovaStar entities were recently sued by a consumer advocacy group over alleged violations of the Federal Fair Housing Act.
NovaStar discriminated against minorities seeking housing in row house neighborhoods and those seeking financing for properties in American Indian Reservations and urban areas for adult foster care, according to the lawsuit. (https://www.mortgagedaily.com/LawsuitsUpdates062207.asp)
Read complete mortgage litigation news at https://www.mortgagedaily.com/Legal.asp
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