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NEXA Mortgage sued over broker’s alleged data theft

Smart Mortgage claims a former loan officer illegally brought a 3,800-name client database with him to his new job

In a lawsuit filed last week, a mortgage brokerage claimed that one of its former loan officers stole a database containing client names and information and brought it with him to a new job at NEXA Mortgage.

Smart Mortgage, which operates in Illinois, Indiana, Colorado and Florida, filed suit against former senior loan processor Brian Noe and NEXA Mortgage earlier this month in federal court in Illinois. The suit mirrors an earlier, parallel legal action filed in Illinois state court.

In the federal lawsuit, Smart Mortgage alleges that Noe downloaded Dropbox on his company computer without authorization on Feb. 1, 2018, and requested and was provided Smart Mortgage’s closed loan log for files he originated at Smart Mortgage between Oct. 2013 and February 2019.

Noe resigned from Smart Mortgage on December 20, 2019 and subsequently accessed and downloaded information from Smart Mortgage’s client database from his company-issued computer, the lawsuit claims. It contains over 3,800 client names and personal identifying information, historical transaction information, client preferences and personalized notes, according to Smart Mortgage.

Smart Mortgage, founded in 1997 by Richard Birk, claims that Noe has solicited and tried to refinance multiple homeowners from Smart Mortgage’s client database.

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The suit further alleges that Nexa “acquired and used information provided by Defendant Brian Noe to solicit residential mortgage customers despite knowing or reason to know that the trade secret was acquired by improper means because it encouraged Defendant Brian Noe to bring his ‘book of business’ to Nexa Mortgage.”

Mike Kortas, the CEO of Chandler, Arizona-based NEXA Mortgage, denied any wrongdoing on behalf of Noe or the company.

Kortas said the company is confident that Smart Mortgage’s claims will be found to lack merit. He said that NEXA will be filing a third motion to dismiss the state lawsuit, which includes identical allegations.

“We hope the court will force Smart to finally defend its baseless allegation rather than permit another amendment,” Kortas told HousingWire on Tuesday. “The federal court case is nothing more than another end-around Smart’s motions to dismiss the state case, and we expect the federal case will fair no better. NEXA is committed to defending both actions and is confident, once the litigation process plays out, that it will be found innocent of any wrongdoing.”

NEXA, founded in 2017 by Kortas, is among the fastest-growing mortgage brokerages in the country. At the end of 2018, the brokerage had 42 loan officers. By August 2019, that number had skyrocketed to 272. The company now says it has just over 800 loan officers operating in nearly every state in the country.

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