Industry News

NovaStar, other Bankrate clients hit with $46 million judgment

Verdict in bait-and-switch lawsuit expected to be appealed

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NovaStar Home Mortgage Inc. and two other lenders accused of engaging in bait-and-switch tactics on the online mortgage-lead-generation site Bankrate.com have been hit with a $46 million judgment. The judgment in favor of another Bankrate.com client, American Interbanc, triples a $15.9 million jury verdict in favor of American Interbanc, on May 4. In a June 27 judgment, Orange County Superior Court Judge Michael Brenner agreed with American Interbanc's claims that attempts by other lenders to prevent the company from using Bankrate.com amounted to an unlawful restraint of trade, subject to triple damages. NovaStar Home Mortgage Inc.'s parent company, NovaStar Financial Inc., said it will appeal the judgment. "We believe the jury decision was not supported by the facts. NovaStar Home Mortgage Inc. will pursue all available means to ask the court to reverse or overturn the verdict," NovaStar said in a statement. American Interbanc's lawsuit against several lenders who used Bankrate.com...