Early last week, Collateral Analytics filed a lawsuit against Nationstar Mortgage. They claim Nationstar stole their technology, replicated their proprietary property valuation software, and are now trying to re-sell the knock-offs to third-party customers.
- Nationstar and Xome, its subsidiary, have been Collateral Analytics customers since 2013
- Nationstar allegedly stole technology, confidential information, and trade secrets from CA
- The lawsuit also claims that Nationstar and Xome acquired their own real estate analytics company to replicate Collateral Analytics’ products
Collateral Analytics develops real estate analytics products, like their automated valuation models and proprietary property valuation technology, for financial institutions, and institutional and retail investors. They just filed a lawsuit against Nationstar Mortgage with some severe allegations of stolen technology and trade secrets.
The lawsuit claims that Nationstar and its subsidiary, Xome, were unable to continue paying for Collateral Analytics’ services, but could not afford to stop using them, Housing Wire reports.
According to the lawsuit: “Because there are no other products on the market with comparable accuracy, coverage, and functionality, (Nationstar and Xome) were unwilling to switch suppliers.”
“And, because it literally takes decades of research and refinement (not to mention many millions of dollars) to make a product with the accuracy, coverage, and functionality that Collateral Analytics displays, Defendants were unable to develop their own.”
Collateral Analytics’ (CA) claims in the lawsuit that Nationstar stole “technology, confidential information, and trade secrets.” It goes on to allege that Nationstar and Xome told engineers at Quantarium – a real estate analytics company acquired by Xome in 2015 – to copy CA’s products with using the stolen technology and trade secrets.
Quantarium has allegedly been servicing Nationstar and Xome with the stolen technology for the past year, and now plans on offering those replicated products to separate third-party customers.
“In fact, Quantarium—no longer satisfied with selling its knock-offs to its affiliates—recently announced that it will start licensing its knock-off iBPO product to third-party customers (other than Nationstar and Xome),” the lawsuit states.
In the lawsuit, Collateral Analytics’ makes clear the extensive measures they use to protect their trade secrets, for which they include their “models, processes, algorithms, workflow, negative knowledge, and data selection,” Housing Wire reports.
Collateral Analytics’ requires customers to enter into a non-disclosure agreement before they are even allowed to see the company’s products. When Nationstar and Xome became customers of CA in 2013, they willingly signed agreements with “broad confidentiality definitions and tight restrictions on what could be done with Collateral Analytics’ confidential information,” according to the lawsuit.
“While Collateral Analytics was working to delight its customer, Nationstar and Xome were secretly plotting to use what they learned from Collateral Analytics to copy Collateral Analytics’ industry-leading tools—all while deceiving Collateral Analytics both about that copying and the fact that they intended to replace Collateral Analytics with the copied products,” the lawsuit claims.