Key facts
- Fifteen plaintiffs allege Veterans United Home Loans engaged in illegal kickbacks and steering, inflating loan costs.
- The lawsuit, filed in the U.S. District Court for the Western District of Missouri, accuses the company of misleading consumers about its affiliation with the VA.
- Plaintiffs argue they paid for settlement services covered under RESPA and that "illegal kickbacks" increased their transaction costs.
- Veterans United denies the allegations, stating they are a private lender and have always been clear about their non-affiliation with the VA.
- The amended complaint includes violations of RESPA and consumer protection laws in multiple states, though some claims have been dropped.
Plaintiffs in a class-action lawsuit are opposing Veterans United Home Loans' motion to dismiss their amended complaint, which alleges the company engaged in an illegal kickback and steering scheme that resulted in overpriced loans for borrowers. The case, overseen by the U.S. District Court for the Western District of Missouri, began in February with accusations that Veterans United, the nation's largest lender of VA mortgages, misled homebuyers about its affiliation with the U.S. Department of Veterans Affairs.
The amended complaint, filed in May, increased the number of named plaintiffs from three to 15 and expanded the claims to eight, including violations of the Real Estate Settlement Procedures Act (RESPA) and consumer protection laws in several states. Veterans United had urged the court to dismiss the suit, characterizing it as a baseless copycat case. The plaintiffs argue that they paid for settlement services covered under RESPA and that "illegal kickbacks" fostered by the lender and its network of real estate agents inflated their transaction costs through higher mortgage rates and fees.
According to court filings, the plaintiffs contend that Veterans United deliberately chose a name and branding that leverages the trust veterans associate with the VA, despite being a private, for-profit corporation founded by individuals with no military service. They point to the company's promotion as the No. 1 VA lender and its use of "military advisers" while allegedly burying disclaimers about its non-affiliation.
Veterans United's corporate communications manager, Chad Moller, stated that the plaintiffs' attorneys have undermined their own claims by abandoning the assertion that the company claimed to be part of the VA. He emphasized that Veterans United is a private mortgage lender and has always been clear about its status, highlighting its service and support for veterans and military families.
The steering allegations center on a business model where agents receiving referrals are allegedly required to direct buyers to Veterans United for financing, with compliance monitored via an app called AgentDash. Agents reportedly pay a significant portion of their commissions to the company. The plaintiffs provided an example of a customer being locked into a higher interest rate than initially offered, costing over $6,000, and cited testimony suggesting competitor loans were substantially cheaper. They described this as a "bait and switch" policy. The plaintiffs have since dropped claims in Texas that were time-barred and removed one plaintiff from Ohio due to statutory time restrictions.