It’s more bad news for Sprout Mortgage. The New York-based mortgage company announced its plans to shutter earlier this month, filed promptly by a lawsuit from former employees alleging unpaid wages. And now, clients want their money as well.
California-based New Wave Mortgage has filed a lawsuit for fraud, breach of contract, promissory estoppel and unjust enrichment.
According to Housing Wire, New Wave said it requested multiple bids from investors earlier this year for the purchase of 51 loans, with a total principal value of $32,864,270. Sprouts offer was accepted and the companies began the due diligence process.
Now, New Wave says Sprout refused to complete the purchase and didn’t return $567,501 of the holdback amount.
New Wave claims Sprout failed to disclose its “financial inability” to purchase the loans, and as such, is seeking compensation for damages it claims it suffered by selling the pool of loans to a third party at a lower price and for the unpaid holdback amount.