OneTrust challenges mortgage coaching neutrality in suit over trade secrets

OneTrust Home Loans filed a lawsuit this week challenging the long-promoted neutrality of mortgage coaching programs, alleging the services were used by a rival to gain a competitive edge.

The California-based lender is suing former loan officer Broch Lassig, mortgage coach Richard Ruby, and Ruby’s company, The Core Training, accusing them of misusing confidential business information to harm its reputation, steer loan officers away from the lender and benefit competitor CrossCountry Mortgage. 

Lassig and Ruby haven’t responded to HousingWire’s requests for comments. A CCM spokesperson said the company does not comment on pending litigation. CCM is not listed as a defendant in the case.

Filed Monday in the U.S. District Court for the Southern District of California, the complaint alleges breach of contract, misappropriation of trade secrets, business disparagement and civil conspiracy. 

Lassig, who joined OneTrust in 2018 as branch manager in Salt Lake City, Utah, left in 2020 for CCM. The lawsuit claims Lassig’s employment contract barred him from sharing confidential information and specified that all such data belonged to OneTrust. 

The company alleges Lassig nonetheless gave his profit-and-loss statements — detailing costs, margins, pricing and fees — to Ruby, while Ruby was coaching him through The Core Training as recently as April 2023. 

OneTrust says it learned of these disclosures through Ruby’s deposition in a separate lawsuit the company filed against Lassig in Utah. According to that testimony, the P&L documents were provided to other Core coaches as well, the lawsuit states.

“OneTrust is very transparent with all the costs, compensation, margins, pricing, fees; if you are a competing lender and have access to that information, you can basically make yourself seem more attractive vis a vis OneTrust,” said Scott Harkless, who just left OneTrust as general counsel to be a founding partner of Brody Gapp LLP and filed the lawsuit.

“These coaches are being used as weapons; they are using trusted information and that coaching relationship for a larger purpose, for a hidden client or for a hidden interest. It’s an issue that needs to be dealt with,” said James Brody, a partner at Brody Gapp LLP.

Attorneys said that during these programs, the ideal would be for the LO to ask permission of the company to share confidential information, which most lenders and real estate brokerages would do since they know most coaches try to be brand-neutral.

The complaint claims Ruby used the information shared by Lassig to benefit CCM. It states, “Ruby also works for CCM. Ruby owns three mortgage branches and has a team of 35 loan officers. In 2023, Ruby’s team at CCM closed 2,000 loans.”

Meanwhile, The Core Training, with 35 coaches and over 1,000 clients, counted nearly 100 CCM employees among its trainees as of July 2023, the lawsuit adds. 

OneTrust claims Ruby used the confidential information and disparaging statements from Lassig to dissuade an LO from joining the lender. That loan officer briefly worked at OneTrust between May and June 2022 before returning to CCM.

OneTrust, a dba for CalCon Mutual Mortgage LLC, is a mid-sized lender that originated about $1.2 billion over the past 12 months through 115 loan officers and 33 branches, according to mortgage tech platform Modex. CCM is one of the nation’s largest lenders with $35.2 billion in volume over the past 12 months and 3,334 producing loan officers across 683 branches.

OneTrust is seeking damages, a jury trial and has left the door open for other lenders to join the lawsuit.