Freedom Mortgage filed a lawsuit against a former executive, accusing him of stealing trade secrets from proprietary software development and using them to design and sell his own artificial intelligence-backed loan-origination system. 

The suit, which was filed last week in federal district court of Eastern Michigan, also claims Brian Sweet, Freedom's former senior vice president of product management, consulted or shared information with employees of competing businesses United Wholesale Mortgage and technology firm BeSmartee in violation of contractual agreements. 

"The confidential and proprietary documents Sweet had access to during his Freedom employment would essentially serve as a blueprint and provide the necessary prompts for use in an AI code-generation software, like Sweet used to develop his LOS platform," the lender's lawyers alleged in the 34-page filing. 

Neither Sweet's attorneys nor Freedom representatives had responded to a request for comment prior to publication or filed legal responses. An inquiry sent to UWM remained unanswered at deadline.

While acknowledging a professional connection to Sweet, a representative from BeSmartee emphasized he never performed work for the company or contributed to software development in any capacity.

"BeSmartee's technology is built by our own team, and we take great pride in the innovation and expertise behind our platform," the mortgage software firm said.

Among the accusations laid out against Sweet were breaches of contract and fiduciary duties, misappropriation of trade secrets and unjust enrichment. While an arbitration agreement remains in force between Freedom and its former employee, the company asked the court for injunctive relief pending its outcome to prevent release of any developed products or LOS plans that may harm the lender.

In the allegations, Freedom's lawyers also stated that Sweet had signed a protective covenants agreement when he accepted his position, which barred him from engaging in certain types of business activities during and immediately after his tenure.

"Sweet's conduct directly violated the terms of his employment with Freedom, including restrictions on competition, confidentiality and Freedom's ownership and intellectual property rights to any software Sweet authored," the company alleged in court documents.

The timeline of events

Freedom appointed the technology veteran to his role in June 2025 and assigned him to lead a team tasked with designing various borrower-facing tools, including a point-of-sale application. Sweet previously spent over a decade at wholesale competitor UWM in several roles.  

In January 2026, Sweet received access to confidential proprietary information regarding his new employer's plan to develop an LOS in cooperation with Xpanse, a partner whose product-pricing engine Freedom already used. Included among the documents shared with Sweet were a 25-page PowerPoint and business plans that detailed the two companies' strategies to incorporate AI in system development and the potential challenges. Freedom and Xpanse expected to later market and sell the tool to other lenders. 

In mid March, Sweet voluntarily informed Freedom of his plans to leave the company, revealing he had been working on creating his own technology that he hoped to sell to other enterprises, with deals expected to generate more than $1 million in revenue. In his resignation letter, he noted he was departing to pursue a "once-in-a-lifetime" opportunity, according to Freedom's attorneys.

"The problem is that his 'opportunity' was built on a foundation of misconduct and at Freedom's expense," the lawsuit stated, with the lender alleging Sweet developed competing products for months with its proprietary information before resigning. 

In subsequent conversations, Sweet said the tool he developed was an LOS, which included document-generation capabilities and a PPE. The tool was developed in consultation with former UWM colleagues, using artificial intelligence code-generation software, the lawsuit said. 

The tech executive further claimed he had been in consultation with BeSmartee to help the vendor develop certain customer point-of-sale applications, a statement the software company refuted. The technology noted by Sweet was "the same type of applications that Freedom was paying Sweet to develop on its behalf," the legal documents asserted.

What Freedom is seeking in the lawsuit

Along with requesting an injunction, Freedom Mortgage is also asking the court to grant compensatory and punitive damages against Sweet. Included among the requests was recovery of any financial gains earned by him from the "wrongful" use of competing software built while he was employed with Freedom. 

The lender is also demanding the former executive return all confidential information received during his nine-month tenure.  

In 2025, the Boca Raton, Florida-based lender originated over $24.1 billion worth of loans across its retail and wholesale channels, according to an IEmergent analysis of Home Mortgage Disclosure Act data. 

In a sign of its growing focus on AI this year, Freedom announced plans to partner with Palantir Technologies in March days after Sweet's departure, with the latter company helping to provide an agentic framework to power mortgage operations.