Cardinal Financial Lawsuit: Fees, Telemarketing, and Settlements

Cardinal Financial, the Charlotte-based nationwide mortgage lender, has been named in a string of lawsuits and one state regulatory action over the past decade. The disputes span consumer class actions over fees and telemarketing calls, servicing complaints from borrowers who entered COVID-era forbearance, a trade-secret fight that shaped one of Cardinal’s own divisions, and a recent mortgage fraud case still working through federal court. Here is what each Cardinal Financial lawsuit involved and where it stands.

New Jersey Processing Fee Class Action

Two New Jersey borrowers, Jonathan A. Galente and James D. Winfrey, sued Cardinal Financial in Hudson County Superior Court, alleging the lender charged an unlawful “Processing Fee” on residential mortgage closing disclosures in violation of the state’s Residential Mortgage Lending Act. The class period ran from January 10, 2017, to January 9, 2023. Cardinal denied wrongdoing.¹

The settlement offered eligible class members a one-time cash payment equal to 55% of the processing fee shown on their closing disclosure. Claims had to be submitted by May 16, 2025, and a fairness hearing was set for August 1, 2025. To qualify, a borrower needed a residential mortgage from Cardinal Financial (NMLS No. 66247) on New Jersey property during the class period. The settlement documents did not disclose an aggregate fund. Class counsel could seek up to $179,718.40 in fees and costs, and the two named plaintiffs were eligible for service awards of up to $1,000 each.¹

$7.2 Million Telemarketing Settlement

In November 2021, Florida borrower Robin Taylor filed a class action in the U.S. District Court for the Middle District of Florida under the federal Telephone Consumer Protection Act and Florida’s Telephone Solicitations Act. The complaint alleged that Cardinal made unsolicited telemarketing calls to 141,049 consumers between November 2017 and November 2022 without their consent.²

Cardinal agreed to pay $7.2 million without admitting wrongdoing. Eligible class members could receive up to $51 each. The company also agreed to end its relationship with the lead aggregator iLeads, which had supplied the consumer data used for the calls.² Final approval came on July 14, 2023.³

Texas Deceptive Trade Practices Class Action

On December 12, 2023, Texas homeowners Bernard Guinard and Joel Luna filed a proposed class action in Dallas County state court. They alleged that Cardinal employees told borrowers who had recently refinanced or modified their mortgages to skip their first one or two payments without warning them about the extra interest that would accrue over the life of the loan. Many of the affected borrowers held VA loans.⁴

The complaint brings claims under the Texas Deceptive Trade Practices Act, along with negligent misrepresentation and gross negligence, and alleges the practice benefited the lender by “tens of millions of dollars.” Plaintiffs’ attorney Rogge Dunn said he expected more plaintiffs to join.⁵⁶ Cardinal declined to comment on the pending litigation as of late 2023.

Maryland Forbearance Servicing Case

Antonio and Joanna Smith sued Cardinal Financial in the U.S. District Court for the District of Maryland in 2022 over the handling of their VA-backed mortgage during and after COVID-19 forbearance. The couple had refinanced a $607,000 loan with Cardinal in October 2019. They alleged that when they tried to exit forbearance, Cardinal gave inconsistent information about arrearage amounts and failed to properly evaluate them for loss mitigation.⁷

In August 2023, Magistrate Judge Timothy J. Sullivan dismissed the Smiths’ claim that Cardinal was required to offer them a loan modification, holding that federal regulations give servicers discretion over which loss mitigation options to present. Four other claims survived, including allegations that Cardinal failed to respond to a qualified written request and that it violated the Maryland Consumer Protection Act through misleading statements.⁷

RoundPoint Trade Secret Case

In 2013, RoundPoint Mortgage Company sued its former president German “Nick” Florez, several other ex-employees, and Cardinal Financial in Mecklenburg County Superior Court. RoundPoint alleged the group used its proprietary software configurations, training materials, customer data, and operating procedures to build Sebonic Financial, Cardinal’s direct-to-consumer division. The complaint raised trade secret misappropriation, breach of fiduciary duty, unfair and deceptive trade practices, civil conspiracy, and vicarious liability claims.⁸

Florez admitted compiling RoundPoint training materials and downloading employee performance data before leaving, but said Cardinal never used them. Cardinal pointed to a policy requiring new hires to certify they would not bring proprietary materials from prior employers, and the court found no direct evidence that Cardinal instructed anyone to use RoundPoint documents.⁸ In 2016, North Carolina Business Court Chief Judge James Gale ruled that RoundPoint had described its trade secrets with “sufficient particularity” and that factual disputes remained for a jury, allowing most claims — including vicarious liability and unfair trade practices against Cardinal — to proceed to trial.⁹ Florez later became president and CEO of Cardinal Financial.

Mortgage Fraud and Title Insurance Suit

In August 2025, Cardinal Financial itself filed suit in the U.S. District Court for the Western District of North Carolina against Investors Title Insurance Company and the closing law firm Shope Krohn Attorneys at Law, seeking to recover $510,000 lost in a mortgage fraud scheme. An identity theft ring used forged documents, including a fake notary stamp, to close a fraudulent loan on a Charlotte property in November 2024.¹⁰

On February 9, 2026, Judge Kenneth Bell ruled that a fraud exclusion in the closing protection letter issued by Investors Title barred Cardinal’s breach of contract claim, reasoning that the loss was fundamentally caused by fraud and identity theft rather than by the closing attorney’s conduct alone. Three other Cardinal claims survived: a claim to compel Investors Title to issue the promised title insurance policy, a bad faith claim, and an unfair trade practices claim under North Carolina law.¹¹ Shope Krohn filed counterclaims against Cardinal and third-party claims against the alleged fraudsters, Wildflower Realty, and its malpractice insurer Lawyers Mutual, arguing that Cardinal itself bore a duty to verify the borrower’s identity.¹² Settlement talks failed in late 2025, and the case remained active as of early 2026.

Washington State Consent Order

In April 2020, Cardinal Financial entered a consent order with the Washington State Department of Financial Institutions. The regulator alleged that Cardinal employed Kevin Michael Killeen in a supervisory role at three Washington branches between June 2018 and March 2019, despite a 2015 enforcement order banning him from participating in the affairs of any consumer loan company following felony convictions involving fraud, dishonesty, or breach of trust. The state also alleged Cardinal aided and abetted Killeen in unlicensed mortgage loan originator activity.¹³

Cardinal agreed to pay $42,800: a $20,000 fine, a $20,000 payment toward financial literacy and education programs, and $2,800 in investigation costs. The company waived its right to a hearing and agreed to cease and desist from employment practices that violated the state’s Consumer Loan Act. Nick Florez, then Cardinal’s president, signed the order.¹³

1
Cardinal Financial Settlement. Galente v. Cardinal Financial Settlement Notice
2
National Mortgage News. Cardinal Financial to Settle Telemarketing Lawsuit for $7M
3
CourtListener. Taylor v. Cardinal Financial Company, Limited Partnership
4
National Mortgage News. loanDepot, Cardinal Sued Over Alleged Deceptive Practices
5
HousingWire. Texas Homeowners Sue loanDepot, Cardinal Over Deceptive Practices
6
PR Newswire. Loan Depot Inc and Cardinal Financial Corporation Face Class Action Disputes Over Deceptive Practices
7
Justia. Smith v. Cardinal Financial Co., LP
8
North Carolina Courts. RoundPoint Mortgage Co. v. Florez, 2016 NCBC 17
9
NC Lawyers Weekly. NCBC: Jury Should Decide Employee Conduct Issues
10
Mortgage Professional America. Court Blocks Cardinal Financial’s $510K Claim Over Title Insurance Fraud Exclusions
11
Orrick Infobytes. Cardinal Financial Company, LP v. Investors Title Insurance Company
12
Justia Dockets. Cardinal Financial Company, LP v. Investors Title Insurance Company et al
13
Washington Department of Financial Institutions. Consent Order No. C-19-2686-20-CO02