NEXA's Kortas vows countersuit in loanDepot trade secret row

NEXA Lending CEO Mike Kortas is pushing back against a trade secrets lawsuit from loanDepot, alleging the competitor has engaged in the same behavior.

The lender and servicer sued NEXA in a Mississippi federal court earlier this week, accusing the rival of helping two Mississippi-based loan officers misappropriate trade secrets in recent months. The lawsuit is just 8-pages long and contains few details of NEXA's alleged behavior, unlike the bulkier poaching accusations mortgage players, including Loandepot, have often filed against one another. 

The two LOs stole confidential information about Loandepot's business and used it to convert clients to NEXA, according to the complaint. The originators, who are not named as defendants, switched firms in January. Loandepot said it commenced arbitrations against the ex-workers.

The complaint for misappropriation of trade secrets and computer fraud seeks injunctive relief for NEXA to stop using, and to return the Loandepot data it allegedly holds. This week's suit appears to be the first legal battle between the prominent industry lenders. 

A spokesperson for Loandepot declined to comment. Kortas, in text messages to National Mortgage News Friday, called the lawsuit "pathetic" and said his company feels strongly that the case will be dismissed.

"We already have case law and NEXA doesn't have a damn thing of theirs," he wrote, suggesting prior litigation outcomes support his company's position. "We've told them that many times and those jackasses just want to pound on their chest because they're getting their asses kicked by brokers anyway."

Kortas said to expect a countersuit, as Loandepot has taken NEXA's LOs and "we have seen our loans go to them."

The competition comments come after Loandepot publicly announced its return to the wholesale space, three years after ditching that business during a difficult stretch. NEXA, a brokerage and non-delegated correspondent lender, has diversified its business in recent years as it plans to roll out a servicing-based incentive for its loan officers. 

A history of litigation

Both companies are in active litigation with mortgage rivals. 

Loandepot has been involved in several poaching complaints, including a few large disputes with retail giant CrossCountry Mortgage. The sides agreed to settle their litigation last year. The Southern California-based Loandepot meanwhile is suing, and defending a countersuit, from prolific brokerage West Capital Lending. While Loandepot has accused WCL of raiding its workforce and stealing leads, the brokerage has in turn piled on steering accusations against Loandepot.

NEXA is facing its own poaching allegations in a yearslong battle with Smart Mortgage Centers. The Arizona-based NEXA has responded to those claims by raising tortious interference accusations against Smart in a case that remains pending. Kortas is also still battling his cofounder Mat Grella in a Maricopa County court in the latest iteration of their 2024 breakup.