Mortgage price-fixing class action overview:
- Who: A group of homeowners filed a class action lawsuit against Optimal Blue LCC and more than two dozen mortgage lenders including Rocket Mortgage, Wells Fargo and JPMorgan Chase.
- Why: The plaintiffs allege the mortgage lenders conspired through Optimal Blue’s pricing software to secretly share sensitive data and fix mortgage rates nationwide.
- Where: The mortgage price-fixing class action was filed in Tennessee federal court.
A group of homeowners has filed a class action lawsuit against Rocket Mortgage, Wells Fargo, JPMorgan Chase and more than two dozen other mortgage lenders.
The plaintiffs filed the mortgage price-fixing class action Oct. 7 in Tennessee federal court, claiming the mortgage lenders conspired to fix residential mortgage rates in violation of the Sherman Act.
They allege the lenders used software from Optimal Blue, a company that provides mortgage pricing and analytics tools, to share non-public, real-time data about their rates, fees and profit margins. The lenders then used this information, the plaintiffs claim, to coordinate their pricing and avoid competition, resulting in higher costs for consumers.
“Defendants have exploited their control of the residential mortgage industry to orchestrate a price-fixing scheme that has inflicted substantial damages on Plaintiffs and the Class,” the class action lawsuit says.
Lawsuit: Mortgage lenders ‘abandoned competition’
The plaintiffs claim that the conspiracy began in 2019, when Optimal Blue launched two new tools that allowed lenders to compare their rates and fees with those of their competitors in real time.
The plaintiffs allege that the lenders agreed to share their data with Optimal Blue in exchange for access to their rivals’ information, creating a “cartel” that eliminated price competition.
The plaintiffs cite data showing that rate spreads — the difference between a loan’s annual percentage rate and the average prime offer rate — for mortgages issued by Optimal Blue users were significantly higher than those of non-users after 2019.
They also cite statements from Optimal Blue executives and customers who praised the software for allowing them to raise their margins without losing market share.
“Since January 2020, rate spreads (the difference between a loan’s annual percentage rate and the average prime offer rate as calculated by the Consumer Financial Protection Bureau) for mortgages issued by Optimal Blue users were approximately 2.68 basis points (49.2%) higher than mortgages from non-users,” the complaint says.
The plaintiffs seek to represent a nationwide class of homebuyers who took out mortgages from the defendants since 2019. They are suing the defendants for violating federal antitrust laws and are seeking treble damages, injunctive relief and other remedies.
In a related mortgage lender case, plaintiffs accuse Wells Fargo of improperly charging certain fees to mortgage applicants during the loan origination process and failed to return the funds for more than a decade.
What do you think of the allegations made in this mortgage price-fixing class action lawsuit? Let us know in the comments.
The homeowners are represented by Tricia R. Herzfeld and Anthony A. Orlandi of Herzfeld Suetholz Gastel Leniski & Wall PLLC, Robin A. van der Meulen, Carmen A. Medici, Jimmy S. McBirney, Isabella De Lisi and Patrick McGahan of Scott+Scott Attorneys At Law LLP and Brian D. Clark, Arielle S. Wagner, Olivia T. Levinson and Kyle Pozan of Lockridge Grindal Nauen PLLP.
The Optimal Blue action lawsuit is Mendez et al. v. Optimal Blue LLC et al., Case No. 3:25-cv-01140, in the U.S. District Court for the Middle District of Tennessee.
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