Mortgage tech firm Lender Toolkit sues two lenders for nonpayment

Mortgage tech firm Lender Toolkit sued two mortgage lenders claiming that the companies failed to make payments while continuing to use its services and software solutions.

Lender Toolkit accused Celebrity Home Loans and MLD Mortgage of breach of contract. Lender Toolkit says Celebrity owes at least $97,288 and MLD Mortgage $138,069. That’s according to separate filings made in the U.S. District Court for the District of Colorado in May. Both lenders entered into a contract with Lender Toolkit in 2021.

Lender Toolkit is a provider of mortgage automation as a service solutions that integrates with Intercontinental Exchange‘s (ICE’s) loan origination system Encompass, according to its website. 

Lender Toolkit’s solutions allow lenders to automate and simplify tasks including disclosure generation and delivery, income calculations and verification and post-closing processes.

Though the three-page lawsuits offer little detail about the contract, including when the lenders stopped paying and what services were offered, a filing from MLD’s chief legal and chief enterprise risk officer included a copy of the contract with Lender Toolkit.

None of the plaintiffs or defendants responded to requests for comment. 

Lender Toolkit charged MLD Mortgage a $2,000 Mortgage Electronic Registration System (MERS) automation set up fee and a $2,000 FHA Upfront Mortgage Insurance Premium (UFMIP) automation fee. 

The vendor charged $2 per funded loan for MERS automation with a minimum of 750 loans per month; and $250 per funded loan for FHA UFMIP automation with a minimum of one loan per month, according to the contract. 

MLD claimed that Lender Toolkit submitted invoices after December 2021 that contained instructions to remit payment to Salt Lake City, Utah and invoices prior to that were submitted to a different PO BOX in Bountiful, Utah. 

On Friday, Lender Toolkit and MLD agreed to transfer the case to New Jersey, where MLD is headquartered after the lender filed to dismiss for improper venue or alternatively transfer venue earlier in August. 

MLD’s Colorado business volume between 2019 and the present accounts for less than 0.1% of its national business volume while production in New Jersey took up about 26.6%, according to MLD. 

MLD Mortgage, doing business as Money Store, posted origination volume of $906 million in 2022, according to data from mortgage tech platform Modex. The lender’s origination volume came in at $261.6 million in the first six months of 2022. The lender has 122 sponsored MLOs and is licensed in 47 states across the country, according to the Nationwide Multistate Licensing System (NMLS).

Celebrity Home Loans hasn’t responded to the allegation. The Oakbrook, Terrace, Illinois-based lender abruptly terminated about 92% of its staff in February and On Q Financial’s deal to acquire some of the company’s assets fell apart. 

The lender has two sponsored MLO and seven active branches in Colorado, Hawaii and Missouri, according to the NMLS. Celebrity’s license was revoked in California in July and suspended in Massachusetts in April, regulatory filings showed.