Zillow faces new claims in an amended RESPA lawsuit
The latest complaint maintains the same core allegation as the original complaint, which alleged that the portal misleads consumers into using agents affiliated with Zillow through its Flex and Premier Agent programs, resulting in high home purchase prices. The testimony in the amended complaint supports these allegations.
According to the amended complaint, Zillow encourages agents to “burn and churn” customers, to cherry-pick borrowers to deliberately hide loan officers’ inexperience and to take advantage of Continued boss to eavesdrop on customer communications and to censor agents from recommending competing lenders.
Testimony from the 12 additional witnesses includes claims that Zillow staff flies into real estate offices to personally instruct Zillow Flex agents on the need to meet Zillow Home Loans (ZHL) quota to prevent things from being put in writing, and that Zillow loan officers often misrepresent or omit important details about borrowers’ actual closing costs, causing buyers to pay excessive costs or risk losing the home.
Additionally, the amended complaint alleges that Zillow induces homebuyers to apply for more expensive loans that do not serve their best interests, which plaintiffs’ attorneys say amounts to violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act.
“Zillow’s real estate industry practices and policies are not simply indifferent to the brokers’ duties to protect the interests of their customers; Zillow actively schemes to undermine them,” the lawsuit said. “Zillow’s goal is simple: to monetize every step of the home buying process – even when it is illegal – and encourage, incentivize and ultimately force agents to violate their fiduciary duties by ignoring the interests of their customers.”
The plaintiffs are represented by Steve Berman, a named partner in a class action lawsuit Hagens Berman Sobol Shapiro LLPthe same firm that represented the plaintiffs in the Moehrl Commission case.
“Twelve current and former agents and loan officers have courageously stepped forward to help our clients build a comprehensive case against Zillow, and with their added information, we believe this lawsuit has the potential to effect major changes in Zillow’s policies and practices,” Berman said in a statement. “Our firm disrupted the real estate industry for the first time by filing antitrust claims before brokerage commissions, and we plan to bring the same research and expertise to our case against Zillow.”
Zillow did not immediately respond to HousingWire’s request for comment.
