California-based wholesale/correspondent lender New Wave Lending Group filed a lawsuit against Sprout Mortgage, accusing the company of defaulting on a pool of $32 million in loans it agreed to purchase. Sprout has been sued by former employees, vendors and business partners since it shut down its operations in early July, laying off its entire staff without severance or their last paychecks. New Wave filed the lawsuit Monday in the U.S. District Court of Southern District of New York against Sprout Mortgage and Sprout Mortgage Asset Trust for fraud, breach of contract, promissory estoppel and unjust enrichment. Sprout’s executives did not immediately return a request for comment, nor did executives at New Wave. New Wave said it requested bids from multiple investors from Jan. 20, 2022, to Feb. 15, 2022, for the purchase of 51 loans, with a total principal value of $32,864,270. After accepting Sprout’s written offer, the parties started the due diligence process. But Sprout refused to complete the purchase of $32,189,270 in loans and didn’t return $567,501 of the holdback amount, New Wave claimed in the lawsuit. Court documents show that Sprout usually held back around 2% of the principal of each loan and returned the sum once due diligence was done and credit and closing documents conditions were satisfied. New Wave claims Sprout failed to disclose its “financial inability” to purchase the loans. New Wave is seeking compensation for damages it claims it suffered by selling the pool of loans to a third party at a lower
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