Caliber sues Union Home Mortgage for trying to “cripple” its Southeast operation

Lender claims rival used illegal tactics to raid 51 employees who generated $400 million in production last year

Caliber Home Loans is suing another direct competitor for raiding its talent pool, accusing rival Union Home Mortgage of trying to “cripple” its retail mortgage operation in the Southeast.

On Oct. 24, the Dallas-based lender filed a lawsuit against Union Home Mortgage and Kevin Cario, a former regional manager, for allegedly raiding 51 employees that produced $400 million in mortgages in 2021, which generated a $1.4 million profit for Caliber.

In its lawsuit, Caliber says Cario supervised the 51 Caliber employees, including 37 LOs, in 18 locations across the South. Virtually all of the employees joined Cario at Union Home Mortgage on the day of his departure or shortly thereafter, the lawsuit claims.

“Union Home wanted to cripple Caliber’s retail mortgage business in the Southeast and eliminate competition, in particular Georgia, Alabama, and South Carolina, and to convert that production, revenue, and profits to its own,” Caliber says in its lawsuit, which was filed in Texas.

Caliber claims Cario conspired with Union to “execute an illegal scheme of unfair competition,” and also used/misappropriated trade secrets and interfered with the lender’s business relations and contracts.

The lawsuit claims Cario’s contract prohibits him from soliciting Caliber employees and retaining, using or disclosing Caliber’s confidential business information.

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Caliber says Cario organized and hosted a group meeting at his house to recruit the employees. He also traveled on the company dime and time to solicit them to Union, the lawsuit alleges.

Union could not immediately be reached for comment.

Union originated roughly $13 billion in residential mortgages in 2021. Through the first nine months of this year, the lender has originated about $5.3 billion in mortgages, according to data from mortgage software firm Modex. The company had 520 active loan officers as of October, per Modex’s data.

The Ohio-based retail lender, like some of its distributed retail peers, has been aggressive in looking to add sales talent during a slow mortgage market.

Although mortgage companies have shed huge numbers of operations staffers, the fight for sales talent remains fierce. A fellow Ohio distributed retail lender, CrossCountry Mortgage, has arguably been the most aggressive.

Cross Country is accused by multiple rivals of illegally poaching talent and stealing “trade secrets.” Among the accusers is Caliber, which in May sued CrossCountry for targeting 80 employees that were responsible for $2.3 billion in mortgage production. Critics of CrossCountry say they believe the tactics – and subsequent lawsuits – are just the cost of doing business for a lender intent on growing.

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