The two lenders have been sparring via legal filings following the departure of James Hecht, former head of production at Newrez, and a handful of executives to OneTrust in the first half of the year.

Newrez has accused Hecht, OneTrust's CEO, of being a mastermind behind an elaborate ruse to raid employees from the Pennsylvania-based company and steal trade secrets.

In response to Newrez's litigation, OneTrust accused Newrez of unfair competition, tortious interference with contract, and defamation. Specifically, Newrez has made it hard for OneTrust to recruit future employees, the San Diego-based company claims.

The lender in its counter complaint also alleges that Newrez has had a "love and hate" relationship with its retail channel, which it purportedly tried to sell twice. 

Newrez notes in a filing June 5 that OneTrust has "failed to state any claim upon which relief can be granted." 

It also added that over 70 Newrez employees (and counting) have actually transitioned to OneTrust since the departure of Hecht and others, which has resulted "in substantial loss to Newrez."

"OneTrust lobs unwarranted allegations of wrongdoing premised on Newrez bringing this lawsuit against OneTrust and vague, speculative allegations of defamation against Newrez," the recent filing reads.

The mortgage lender goes on to take apart the claims made by its competitor, noting the "counterclaims contain conclusory allegations of unlawful conduct but lack any…factual substance." 

OneTrust's unfair competition claim depends greatly on Newrez filing the suit against it, alleging it was done for improper purposes and to unfairly compete against it. Newrez's recent filing argues this "is not the type of conduct that supports an unfair competition claim [in Pennsylvania.]"

Additionally, OneTrust's tortious interference of contract claim alleges Newrez is "preventing the departure of Newrez employees who seek better job opportunities with OneTrust." But the Pennsylvania-mortgage lender and servicer argues this claim "consists of nothing more than conclusory allegations and fails to specifically identify what contracts — existing or prospective — with which Newrez allegedly interfered."

Newrez does admit, however, that around February 2024 OneTrust entered an employment contract with a former Newrez employee. She was going to be a manager but ultimately opted to not work at OneTrust because of fear of litigation. 

"This individual resigned her position with OneTrust, and, instead, joined a competing mortgage servicer," the filing says.

Joshua Eskine, founder of OneTrust Home Loans, said in a statement Thursday the company fully stands behind the "facts and claims we set forth."

"[We] will forcefully respond to Newrez's baseless motion in due course in the litigation where the truth as we explained it will prevail."

Meanwhile, a spokesperson for Newrez said the company does not "comment on active litigation."

"However, this filing reiterates our commitment to protecting our company's interests, values, and reputation, and we will vigorously pursue all legal remedies available to us," he added.

Earlier this year, Newrez reasserted its dedication to retail with an executive noting that it is "100% committed to the distributed retail channel." They also highlighted that "connecting our servicing portfolio and our servicing leads on a localized basis is really the differentiator on how we connect with our customers."

Speaking of servicing, Newrez finalized the acquisition of Computershare Mortgage Services and affiliate Specialized Loan Servicing LLC in early May.

Real estate investment trust Rithm Capital Corp, parent company of Newrez, bought the company for close to $720 million as a means to further expand its servicing presence. 

The integration of Computershare adds $149 billion in unpaid principal balance to the company. This includes $104 billion in third-party servicing to Newrez's portfolio, the company said in a recent press release

The New York-based company posted net income of $261.6 million, equivalent to 54 cents per share in the first quarter. The mortgage originations and servicing segment at Rithm, the parent company of Newrez, brought in $311.9 million in net income during the quarter as loan production and fair value of MSRs both improved.