Key facts
- A federal judge dismissed most claims in a lawsuit against Veterans United Home Loans and its affiliates.
- The judge allowed certain Real Estate Settlement Procedures Act (RESPA) claims to proceed.
- The lawsuit involves allegations of steering borrowers and concealed commission payments.
- Five of eight counts were dismissed, including state consumer protection claims and unjust enrichment.
- Most RESPA claims were dismissed as time-barred, but kickback and fee-splitting allegations for a few borrowers survived.
- The court will require further factual development to determine if RESPA's safe harbor applies.
A federal judge in Missouri has dismissed the majority of claims brought by 15 borrowers against Veterans United Home Loans and its affiliated entities, but allowed certain Real Estate Settlement Procedures Act (RESPA) allegations to proceed. The lawsuit, filed in the U.S. District Court for the Western District of Missouri, alleged that Veterans United and its affiliates used a strategy involving misleading branding and a real estate agent referral network to steer borrowers toward their financing services while concealing substantial commission payments.
Judge Willie J. Epps Jr. dismissed five of the eight counts in the amended complaint, including claims under state consumer protection laws in Missouri, Illinois, Ohio, and Texas, as well as a nationwide unjust enrichment claim. Veterans United expressed satisfaction with the ruling, with corporate communications manager Chad Moller stating the company has never held itself out as the VA and is a private lender.
While most RESPA claims were dismissed as time-barred, the court allowed specific claims to move forward for a subset of borrowers. These include RESPA Section 2607(a) kickback-for-referral claims for two borrowers and RESPA Section 2607(b) fee split claims for three borrowers. These surviving claims allege that real estate agents paid approximately 35% of their commissions to Veterans United Realty and related companies without those entities performing any services. The court declined to apply RESPA's safe harbor for cooperative brokerage at this early stage, indicating that further discovery is needed. The plaintiffs have been granted 14 days to amend their complaint.