Velocity Financial Beats Investor Suit on IPO, Pandemic Outlook

Velocity Financial Inc. is free of a would-be class suit alleging it misled investors about loan performance and the coronavirus pandemic’s impact on the real estate market, after a federal judge in California dismissed the case.

The mortgage firm’s investors failed to properly allege that Velocity misled them ahead of its January 2020 initial public offering, Judge R. Gary Klausner of the U.S. District Court for the Central District of California said.

Investors alleged that Velocity made its finances look healthier by leaving out information about an increasing rate of nonperforming loans. But the complaint’s “own chart shows an ...