Kelly,
a
Texas
resident,
was
hired
in
June
2025
as
director
of
retail
sales
and
a
loan
officer.
Harris,
also
of
Texas,
joined
the
company
in
May
2025
as
a
strategic
advisor.
Both
say
they
were
“personally
solicited
by
Beech”
between
November
2024
and
June
2025
away
from
prior
employment
and
“to
transition
a
producing
team
of
loan
officers
to
Direct.”

Tech
platform

According
to
the
complaint,
Beech
told
the
duo
that
Direct
Mortgage’s
technology
would
significantly
reduce
production
costs
and
streamline
compliance,
and
that
the
company
had
roughly
$3.2
million
in
working
capital.

The
plaintiffs
allege
those
representations
were
false
and
that,
after
they
joined,
the
platform
generated
inaccurate
loan
documents
and
operational
failures
that
posed
compliance
risks.

“Beech
made
specific
representations
about
Direct’s
proprietary
technology
platform
and
the
operational
infrastructure
supporting
it;
however,
after
joining
Direct,
it
became
apparent
to
Plaintiffs
that
the
technology
platform
did
not
function
as
represented,”
the
suit
reads.
“By
Fall
2025,
it
was
clear
that
Direct’s
technology
platform
was
incompatible
with
effective
mortgage
operations.”

Compensation
and
a
loan
to
the
company

The
lawsuit
claims
the
two
men
relied
on
those
representations
in
accepting
employment
offers
that
included
equity
incentives
and
an
option
agreement
tied
to
the
potential
purchase
of
the
company.

After
learning
the
company
was
short
on
working
capital,
despite
being
told
the
aformentioned
$3.2
million
was
available,
Kelly
and
Harris
claim
that
they
personally
loaned
Direct
Mortgage
$200,000
to
stabilize
operations,
with
the
understanding
that
the
funds
would
be
repaid.
The
company
never
repaid
the
loan,
the
lawsuit
alleges.

The
complaint
also
accuses
Direct
Mortgage
of
violating
the
Fair
Labor
Standards
Act
and
Texas
labor
law
by
failing
to
pay
minimum
wage
and
overtime
compensation.

Kelly
alleges
he
worked
as
many
as
90
hours
in
a
week
and
closed
approximately
$10
million
in
loans,
but
received
no
commissions
or
bonus
compensation.
Harris
claims
he
worked
up
to
112
hours
per
week
and
was
promised
a
bonus
equal
to
25%
of
the
increase
in
operating
profit
during
his
tenure,
but
was
never
paid.

The
lawsuit
alleges
the
company
failed
to
track
hours
and
had
no
policies
in
place
to
pay
overtime,
resulting
in
wages
that
fell
below
minimum
wage
during
their
employment.

In
addition
to
unpaid
wages
and
the
$200,000
loan
repayment,
the
plaintiffs
seek
liquidated
damages
under
federal
law,
civil
penalties
under
Texas
law
and
a
jury
trial.

The
defendants
had
not
filed
a
response
to
the
complaint
as
of
Tuesday.
Neither
the
plaintiffs’
legal
teams,
Beech,
Direct
Mortgage
or
LenderMac
responded
to

HousingWire’s
requests
for
comment
at
the
time
of
publication.