Google will enter the market for offering mortgage loan quotes, according to a lawsuit filed by LendingTree in the District Court for the Western District of North Carolina.

LendingTree filed the lawsuit August 25 versus technology partner Mortech, alleging the company violated its contract with LendingTree by partnering with Google to launch an online mortgage loan aggregator service similar to LendingTree. The competing service is expected to launch in August or September, according to a copy of the complaint obtained by eWEEK.

New competition in itself doesn't merit a lawsuit, but LendingTree claims that Mortech, which provides automated lender offers for LendingTree, intends to support Google's new Web service with its pricing engine. This could breach a confidentiality agreement Mortech signed with LendingTree limiting its ability to make its pricing engine available to other Web loan aggregators.

As proof, LendingTree also said it possesses screenshots of the trial version of Google's service that prove the search engine will provide customers with conditional loan offers in addition to lenders' contact information. LendingTree declined to provide the screenshots to eWEEK.

LendingTree claims it tried to resolve the dispute in phone calls with Mortech but took legal action when this failed. "We will vigorously protect our contractual rights, our company, our customers and our clients in this matter," said LendingTree CEO and Founder Doug Lebda in a statement.

LendingTree is asking the court for a temporary restraining order and preliminary injunction enjoining Mortech from working with Google. The North Carolina court has scheduled a hearing on the matter for September 2.

Update: Google told eWEEK it would not comment on the suit because it is not party to it, but added that:

“We’re constantly looking for new ways to help people find what they are looking for on the Internet. As part of that effort, we are currently working on a small ad unit test that will run against a limited number of mortgage-related search queries in the U.S. We have a number of experiments going on at any one time, but we don't speculate on future product development."

Google has indeed been looking to broaden the ways it collects search advertising revenue. The company has been dipping its toe in a number of areas that lead consumers back to its search engine. For example, the company has created a mobile operating system, a Web browser, and is planning to offer an operating system for netbooks. These applications and platforms are free, but are designed to bring more users searching to Google.

LendingTree and Mortech have cultivated a close partnership. As recently as June 23, representatives from LendingTree and Mortech met to discuss a number of ideas that LendingTree is currently developing and intends to bring to market in the future. The mortgage quote specialist claims that, by working with Google, Mortech will disclose proprietary and secret information that it has about LendingTree, including ideas for future products.

"Mortech will undoubtedly use this information during the course of its relationship with Google and such disclosure will irreparably damage LendingTree's future business," according to the claim.

Read more about this topic on TechMeme here.