HOUSTON, Nov. 2, 2004 (PRIMEZONE) -- Concerned over alleged misrepresentations found in court documents filed by NovaStar Home Mortgage, United States District Court Judge Nanette K. Laughrey dissolved a Temporary Restraining Order which had prohibited Allied Home Mortgage Capital Corporation from contacting or soliciting certain NovaStar branches. Allied, headquartered in Houston, Texas, and NovaStar, based in Kansas City, Missouri, are competitors in the residential mortgage origination business.
According to court documents, NovaStar and Allied had been in discussions regarding the transfer of approximately 77 NovaStar branches to Allied. On September 30, 2004, NovaStar and Allied entered into an agreement by which Allied agreed not to solicit certain NovaStar branches until the transfer agreement was finalized. NovaStar alleges that Allied prematurely solicited some of NovaStar's branches.
On October 27, 2004, NovaStar asked the United States District Court for the Western District of Missouri to prohibit Allied from soliciting certain NovaStar branches. NovaStar maintained it intended to retain certain branches and feared that "Allied will cause the branches to harbor serious feelings of uncertainty as to the future of their relationship with NovaStar." The court responded by issuing a Temporary Restraining Order against Allied.
On October 28, 2004, however, NovaStar released its third quarter earnings and announced it would allow the branches that were the subject of the discussions with Allied to leave NovaStar and affiliate with 1st Metropolitan Mortgage of Charlotte, North Carolina, Allied's competitor. None of this information was disclosed to the court at the time NovaStar applied for the Temporary Restraining Order.
On October 29, 2004, the court entertained an emergency hearing at Allied's request. Upon hearing evidence of NovaStar's October 28, 2004, announcement, Judge Laughrey dissolved the Temporary Restraining Order, stating, "that way (Allied) will have an opportunity to compete in the marketplace for these branches that, in fact, (NovaStar) no longer is interested in."
Allied's President, Jim Hodge, applauds the court's ruling. "Faced with the uncertainty created by NovaStar, their branches should be free to explore the best opportunities for themselves. We believe Allied can provide those opportunities," Hodge said.
About Allied:
Founded in 1991, AHMCC is the largest privately held mortgage banker/broker in the U.S., with more than 650 offices operating in 49 states, Guam and the Virgin Islands. It offers a wide variety of mortgage products and services from over 800 lenders.
In 2003 the company funded over $15 billion in loans and was named as one of "The Top 25 Tech-Savvy Lending Firms" by Mortgage Technology magazine -- a feat they repeated in 2004.
For more information about the company, visit Allied's websites at www.branchasap.com, www.mortgageasap.com and its Spanish language site, www.prestamopronto.net.
The Allied Home Mortgage logo can be found at:http://media.primezone.com/prs/single/?pkgid=704