What supposedly took place next is where the case gets intriguing for anybody in the home loan maintenance service.
When First American pressed for payment, Novad allegedly said it could not pay because of a contractual dispute with HUD– and guaranteed to settle up once it recuperated funds from litigation versus the company. Very first American says it relied on those assurances, held off on collection, and entered into a series of tolling arrangements extending into October 2025.
But the filing paints a really different image behind the scenes. It declares that in 2023, the Customer Financial Protection Bureau investigated Novad for fraud in connection with its reverse home mortgage maintenance. By June 2024, Novad had reportedly gone into an authorization decree with the CFPB, admitting to misleading practices in offense of the Consumer Financial Protection Act and accepting a long-term ban from the reverse home mortgage business totally. According to the court documents, none of this was ever shared with Very first American.
The alleged concealment did not stop there. The filing mentions that Novad reached a settlement with HUD in September 2025 and received full payment– yet on December 9, 2025, told First American that the Department of Justice had not yet accepted the deal. After that exchange, Novad allegedly went dark and stopped reacting to any inquiries.
Very first American has considering that filed a demand for arbitration and is now asking the court for an emergency order to freeze Novad’s accounts at Truist Bank before the funds can be moved. No final determination has been made in the case, and Novad has not yet responded to the claims.