Mortgage lenders loanDepot and Cardinal Financial are the targets of class-action-seeking lawsuits alleging deceptive practices, negligent misrepresentation and gross negligence against Texas homeowners.
In a pair of lawsuits filed in a state court in Dallas County, each targeting one of the lenders, homeowners allege that the companies’ employees induced them into entering refinancing agreements and skipping the first one or two payments on their new loan.
“In doing so, you failed to make disclosures and/or provide relevant and essential information to Plaintiffs and other members of the class regarding the impact on said homeowners in skipping/delaying one or more mortgage payments in connection with their respective transactions,” attorneys for plaintiffs wrote in the lawsuits.
Both companies have rejected the class’s efforts to seek an amicable solution, the attorneys said in a statement. Ultimately, the lawsuits were filed on Dec. 12 in state court in Dallas County. It claims the companies violated the Texas Deceptive Trade Practices Act.
A spokesperson for loanDepot wrote in an emailed response that the company does not comment on pending litigation. Representatives at Cardinal Financial did not immediately respond to a request for comments.
The homeowners believe the class action could include “hundreds of thousands” of individuals. In a statement, attorneys for the plaintiffs said many of the alleged deceived borrowers are veterans who had VA loans.
According to the lawsuits, homeowners who skipped their payments – encouraged by the lenders’ staff – ended up paying added interest throughout the loans. The alleged negative impact was never disclosed to the borrowers but benefited the lenders by tens of millions of dollars, attorneys for the plaintiffs said in a statement.
“When you trust big companies with expertise and industry knowledge, you expect them to be honest and give sound advice,” an attorney for the plaintiffs, Rogge Dunn, from Rogge Dunn Group, said in a statement. “Instead, loanDepot and Cardinal Financial used their position to exploit homeowners to their own benefit.”
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