Despite numerous efforts to have the racketeering charges dismissed, the future appears to be fraught with difficulties for the prominent non-bank lender. The company has repeatedly sought to have multiple motions to dismiss the charges, but their attempts have thus far been unsuccessful. This ongoing legal predicament suggests that the lender could be facing significant challenges ahead.
CrossCountry Mortgage, a major non-bank lender, is facing a new lawsuit filed by California-based lender American Mortgage Network (AmNet). According to the complaint filed in the U.S. District Court for the Northern District of Georgia, AmNet alleges that CrossCountry used a specialized team, referred to as a “transition desk,” to lure one of its branch managers away and divert loans to their own company. The lawsuit includes ten counts, with one of them accusing CrossCountry of racketeering, which is typically associated with criminal enterprises.
The suit names former AmNet employee Spencer Thomas and CrossCountry manager William Myers as defendants. Thomas, who worked as a branch manager and senior loan officer for AmNet, is accused of engaging in secret discussions with CrossCountry in May of the previous year, eventually leading to his departure from AmNet in August. During this period, Thomas is alleged to have diverted loans worth around $28 million to CrossCountry, violating his contractual obligations and trade secrets laws.
AmNet claims that CrossCountry operates a dedicated team known as the “transition desk,” which facilitates the transfer of loans from competitors by using their own loan officers as agents, even though those officers are still licensed and employed by rival companies. The lawsuit further asserts that CrossCountry has employed similar tactics in the past, citing previous poaching lawsuits from Annie Mac in 2020 and loanDepot in 2018. The “transition desk” consists of nine loan officers led by CrossCountry production manager William Myers, who reports to chief production officer Craig Montgomery.
According to the complaint, CrossCountry also provides legal advice and indemnity to loan officers recruited from competitors, protecting them from legal action brought by their former employers. AmNet references a 2018 lawsuit against CrossCountry by Homeside Financial to support this claim.
AmNet seeks damages from CrossCountry and requests an account of all loans that Thomas diverted and closed or attempted to close with CrossCountry Mortgage since last May. Additionally, AmNet seeks disgorgement of the profits CrossCountry gained from these diverted mortgages.
Founded in 2019, AmNet is a fully employee-owned company with 164 workers listed on LinkedIn. They offer various types of loans and are licensed in 41 states and Washington, D.C., with additional state licenses pending. In contrast, CrossCountry Mortgage is a large non-bank lender that generated $53.5 billion in lending volume in 2021 and employs around 8,000 people across 600 branches nationwide. The company has faced raiding accusations from multiple lenders, including ongoing lawsuits from loanDepot.