Key facts
- Zillow faces renewed RESPA claims in a third amended complaint.
- The lawsuit alleges Zillow required agents to steer homebuyers to Zillow Home Loans for referrals.
- Plaintiffs claim this arrangement violated RESPA and led to higher consumer mortgage costs.
- An economic study estimates ZHL borrowers paid roughly $2,881 more per comparable loan.
- The most recent complaint narrowed the claims and reduced the number of named plaintiffs.
- Zillow maintains the lawsuit has no merit and that its tools are free, transparent, and optional.
Zillow is once again facing allegations of violating the Real Estate Settlement Procedures Act (RESPA) following the filing of a third amended complaint in a consolidated lawsuit. The plaintiffs contend that Zillow's Flex and Premier Agent programs, which connect homebuyers with agents, also require agents to steer clients towards Zillow Home Loans for mortgage pre-approvals. This alleged undisclosed arrangement is claimed to violate RESPA by providing agents with leads in exchange for mortgage referrals, thereby potentially causing consumers to pay more for loans.
The latest complaint, filed after a judge granted Zillow's motion to dismiss the previous version, narrows the scope of claims and reduces the number of named plaintiffs from twelve to five. Notably, Alucard Taylor, whose name was closely associated with the suit, is no longer a named plaintiff. The plaintiffs are seeking damages, including treble damages under RESPA, as well as injunctive relief and disgorgement.
Zillow has reiterated its belief that the lawsuit lacks merit, stating that the tools it offers are free, transparent, and optional. The company expressed confidence in its defense, asserting that the amended complaint does not alter the facts or the law. Previously, other defendants, including The Real Brokerage and The Frano Team, were voluntarily dismissed from the suit, while GK Properties was dismissed due to time-barred claims. Claims against eXp Realty remain pending.