"According to the complaint, loanDepot required LOs who couldn't push higher-cost loans to transfer the borrower to an internal loan consultant (ILC) under the false pretense that it was done at the customer's request. But the transfer was described as fiction, since the original LO supposedly continued performing the same duties. The firm allegedly punished LOs with reduced commissions if they failed to close loans at inflated rates, or eliminated compensation entirely if they didn't falsify documentation to conceal the activity."
"Meanwhile, borrowers were routinely steered into more expensive loans by LOs who were under pressure to offer the highest pricing and faced financial penalties for failing to do so, the lawsuit claims. None of the plaintiffs' loans were transferred to these ILCs, so they claim they paid higher rates and fees. Even assuming these assertions are true and they are not this alleged scheme' was not used for Plaintiffs' loans; it was purportedly used for loans issued to other consumers who ultimately received lower rates"
Plaintiffs sue loanDepot under the Truth in Lending Act and allege wire fraud, securities fraud, and conspiracy for an alleged scheme that steered borrowers into higher-cost loans. Plaintiffs assert loanDepot required loan officers unable to push higher-priced loans to transfer borrowers to internal loan consultants (ILCs) under the false pretense of customer request while the original officers continued the same duties. The firm allegedly reduced or eliminated commissions for officers who failed to close inflated loans or did not falsify documentation. Borrowers allegedly were routinely steered into more expensive loans. loanDepot contends the plaintiffs lack standing because their loans were not affected.
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