"Kentucky-based Stockton, which had 222 sponsored LOs across 76 active branches as of Tuesday, claims that former employees diverted clients to Novus while still employed by the company. The lender said it is aware of at least four borrowers who have transferred their accounts to Novus. According to the lender, Wisconsin-based Novus, which had 417 LOs across 10 branches, was complicit in this scheme and actively aided and encouraged the former employees to breach their duties."
"Stockton said it maintains proprietary data related to borrowers and confidential mortgage loan pricing and programs. It claims it takes steps to protect records through password protection and prohibitions against removing or copying files without express approval. The first red flag was a reduction in credit pulls a primary indicator of origination activity. In July and August, Hoffman's branches had 166 and 145 unique credit pulls, respectively."
"Hoffman, specifically, is accused of exporting confidential and proprietary datasets from DOMO Stockton's information management SaaS application to his personal computer multiple times in 2025. The employees, who began joining Stockton in 2023 when manager Hoffman came on board, allegedly left for Novus in 2025. However, according to the lawsuit, rather than immediately resigning, they exchanged countless emails and other communications with Novus to divert borrowers between August a"
Stockton alleges multiple employees diverted clients and confidential borrower information to Novus while still employed. Stockton reports at least four borrowers transferred accounts to Novus and claims Novus aided and encouraged breaches. Stockton says it holds proprietary borrower data and confidential mortgage pricing, protected by passwords and prohibitions on copying. Internal monitoring showed credit pulls in Hoffman's branches fell from 166 and 145 in July and August to 119 and 43 in September and October, suggesting diverted originations. An internal investigation found alleged sharing of pay stubs, W-2s and loan estimates, and Hoffman is accused of exporting datasets from DOMO to his personal computer multiple times in 2025.
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