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The Securities and Exchange Commission is examining whether Better.com violated federal securities laws, the online mortgage lender disclosed yesterday, the Wall Street Journal reported. Federal securities regulators have requested documents from Better.com and its blank check company Aurora Acquisition Corp. about their business activities, the companies said in filings with the SEC. They also are seeking information about the business activities of Better.com Chief Executive Vishal Garg and allegations made by former executive Sarah Pierce. Pierce alleged in a lawsuit last month that the company misled investors in financial filings and other representations it made as it attempted to go public. Ms. Pierce was Better.com’s former executive vice president for sales and operations. Better.com said at the time that Ms. Pierce’s claims were without merit and it would vigorously defend the lawsuit. In its filing Thursday, the company said it was cooperating with the SEC. Better.com said in a statement that it voluntarily provided all materials requested and that it was “happy to set a high bar for transparency and responsiveness.” Better.com was a winner amid the boom in housing prices and mortgage refinancing that accompanied the pandemic and low interest rates. The company grew revenue nearly 10-fold to $876 million in 2020 from the year prior, posted a profit of $172 million and hired thousands as it rushed to keep up with the market, company filings said. It raised $500 million from SoftBank Group Corp. last year and weeks later said it planned to go public at a valuation of $7 billion. Better.com since has been rocked by the rise in interest rates and resulting sharp pullback in refinancings, as well as a controversy when Mr. Garg laid off 900 workers via a Zoom call in December. He took a brief leave after the call sparked an uproar. The company shed about 7,500 jobs, or 72% of its total workforce, between the end of last year and May, according to the company’s filing Thursday. At its peak, it had 10,400 employees at the end of 2021. In May of this year it had about 2,900 employees.

A federal appeals court ruled that lenders can’t foreclose on homes when people named in the foreclosure proceedings file for personal bankruptcy, even when they don’t directly own the property at issue, WSJ Pro Bankruptcy reported. The U.S. Second Circuit Court of Appeals said Wednesday that lender Bayview Loan Servicing LLC improperly foreclosed on the primary residence of Eileen Fogarty shortly after she filed for bankruptcy protection in 2018. Ms. Fogarty’s bankruptcy filing triggered an automatic stay on collection efforts by her creditors. Bayview violated the stay when it sold her home at a foreclosure auction days later, the three-judge panel ruled Wednesday, while remanding her case to bankruptcy court to determine sanctions against the lender. Ms. Fogarty had lived in the house in Shirley, N.Y., owned by 72 Grandview LLC, a limited liability company in which she held a 99% interest. The company in 2010 stopped making payments on a mortgage loan backed by the property, and the lender moved to foreclose the following year, naming both the company and Ms. Fogarty as defendants in the foreclosure lawsuit. After Ms. Fogarty filed for bankruptcy, Bayview took the position that it could proceed because the property’s owner was the LLC, which wasn’t in bankruptcy. The U.S. Bankruptcy Court in Central Islip, N.Y., sided with the lender and rejected Ms. Fogarty’s request for sanctions as punishment for selling the home despite her personal filing. A federal district judge reversed, ruling in her favor. Bayview then appealed to the Second Circuit. “[W]e conclude that Bayview willfully violated the automatic stay when it completed the sale while knowing that Fogarty, a named party in the foreclosure action, had filed a bankruptcy petition,” the appeals court said, noting an “error of law” at the bankruptcy-court level.

Former employees of First Guaranty Mortgage Corp. are suing the Plano, Texas-based company after it laid off 75% of its staff on June 24 and filed for bankruptcy, and they claim the company also previously terminated hundreds of employees without notice earlier this year, the Dallas Morning News reported. The former employees — Lori Buckley, Gayle Zech, Roberta Martinez, Jennifer Jackson and James Davies — filed a class-action lawsuit against the company June 30 in the U.S. Bankruptcy Court for the District of Delaware. Some of those employees and several others filed separate, similar class-action suits in U.S. District Courts on June 29. The former employees claim the lender didn’t give them the 60-day layoff notice required under the federal Worker Adjustment and Retraining Notification Act, and they are asking for the 60 days of back pay and benefits required when not giving the notice. First Guaranty “could’ve and should’ve done something more professional. They didn’t,” said Jack Raisner, founding partner of Raisner Roupinian LLP, which is representing the former employees in the bankruptcy case. “For whomever this happens to, it is a life-changing experience. Losing a job like this can be catastrophic.” The June 30 complaint alleges that First Guaranty previously laid off about 300 employees on April 27 without cause and did not file a WARN notice with the state. One of those employees, Davies, was rehired June 7 and terminated again in the mass layoff later in the month, the complaint said. The company began its bankruptcy court hearing on Friday, which allowed the company to borrow funds to continue operations while in bankruptcy, Raisner said. It is not yet known whether the company plans to sell or reorganize in some other way.