Top-five mortgage lender CrossCountry Mortgage (CCM) has sent cease-and-desist letters to at least 25 former loan officers, according to documents viewed by HousingWire and interviews with one of their new employers. In the letters, CCM invokes a two-year, non-solicitation window and demands thousands of dollars in combined penalties under their employment agreements.
The company cites a contractual provision creating a “legal presumption” that any mortgage product or service provided to a past, present or future CCM customer violates the agreement. Under that framework, CCM declares that “each loan is presumed to violate your non-solicitation covenant.”
The letters, dated Oct. 29, were sent by Ashley C. Wakefield, senior corporate counsel for Cleveland-based CrossCountry Mortgage. Each document contains the same three-part demand: a cease-and-desist order, a demand for payment based on 75 bps for each refinanced loan, and a litigation preservation notice. CCM gives the recipients 10 business days to respond.
According to the letters seen by HousingWire, the repayment amounts range from several thousand dollars to nearly $20,000 dollars in the case of one letter.
Representatives at CrossCountry Mortgage did not immediately respond to HousingWire’s request for comment.
Details of the claims
CCM’s letters lean heavily on restrictive covenants in the employment agreements allegedly signed by the LOs. CCM argues that the agreements contain provisions around confidentiality, nonsolicitation and return of property provisions that survive an employee’s departure.
The company asserts that confidential material covered by the agreements includes all non-public personal information of borrowers that is protected under the Gramm-Leach-Bliley Act. It goes on to say that every loan handled by the LOs during their time there “remains CCM’s sole and exclusive property.”
How many LOs could be impacted?
While the letters obtained by HousingWire address a small number of LOs, many others have left CCM in recent years for other companies. They could be part of a larger pattern of cease-and-desist orders, along with potential litigation, if they’ve closed loans since then with any CCM customers.
RETR data shows that 843 loan officers have left CrossCountry Mortgage in the past 14 months. Sixty-one of them did at least $20 million in volume during that period, although it’s unknown how much of that volume was tied to former CCM clients. Many others are now inactive LOs or have produced no loans.
Beyond the cash demands — which were labeled as payable by check mailed to CCM’s headquarters in Cleveland within 10 business days — the letters call for the recipients to stop originating loans for any CCM customer, prospect or referral source, to stop using any CCM confidential material, and to certify in writing that they’ve returned all company materials.
The letters also include a warning that “litigation over these matters is reasonably likely.” The recipients are instructed to preserve a sweeping range of records, including offer letters and compensation details from their current employer, along with loan files, lead-source data, CRM and loan origination system records, and communications with any current or former CCM borrower.
This preservation demand also mentions personal devices and digital tools, specifically naming email, text and instant messages, voicemails, call logs, calendar entries, shared drives, cloud accounts and “AI chat history.” The recipients are instructed to immediately suspend any auto-delete or device replacement practices, warning that failure to preserve evidence “may expose you to sanctions for spoliation.”
If the recipients don’t comply within 10 business days, “CCM may file suit without further notice,” the letters state.
Editor’s note: Sarah Wolak contributed to this report.
