Direct Mortgage ex-employees sue over fraud and unpaid wages

"Beech made specific representations about Direct's proprietary technology platform and the operational infrastructure supporting it; however, after joining Direct, it became apparent to Plaintiffs that the technology platform did not function as represented, the suit reads. By Fall 2025, it was clear that Direct's technology platform was incompatible with effective mortgage operations."

"According to the complaint, Beech told the duo that Direct Mortgage's technology would significantly reduce production costs and streamline compliance, and that the company had roughly $3.2 million in working capital. The plaintiffs allege those representations were false and that, after they joined, the platform generated inaccurate loan documents and operational failures that posed compliance risks."

"After learning the company was short on working capital, despite being told the aformentioned $3.2 million was available, Kelly and Harris claim that they personally loaned Direct Mortgage $200,000 to stabilize operations, with the understanding that the funds would be repaid. The company never repaid the loan, the lawsuit alleges."

Kelly and Harris were recruited to Direct Mortgage between November 2024 and June 2025 with promises that the company's proprietary technology would reduce costs and streamline compliance, and that it had $3.2 million in working capital. After joining, they discovered the technology platform malfunctioned and generated inaccurate loan documents, creating compliance risks. By fall 2025, the platform proved incompatible with mortgage operations. Learning the company lacked adequate working capital, both employees personally loaned Direct Mortgage $200,000 to stabilize operations, which was never repaid. The lawsuit also alleges wage violations, claiming Kelly worked up to 90 hours weekly while closing $10 million in loans without receiving commissions or bonuses.

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