Layla Zulfa
Veterans United Home Loans, a subsidiary of Mortgage Research Center, has formally requested the dismissal of a sweeping class-action lawsuit that accuses the prominent mortgage lender of misleading consumers and steering them toward more expensive loan products. The lender’s legal team argues that the plaintiffs have failed to demonstrate any tangible harm or establish a valid legal claim, a critical hurdle in challenging the allegations. The plaintiffs’ attorneys have thus far declined to comment on the ongoing legal proceedings.
The Core of the Allegations: Misleading Affiliation and Costly Loans
The original complaint, filed in the U.S. District Court for the Western District of Missouri, centers on claims that Veterans United, a private, for-profit corporation, has deliberately created the impression of an affiliation with the U.S. Department of Veterans Affairs (VA). This alleged misrepresentation, the lawsuit contends, has led homebuyers, particularly veterans and active-duty military personnel, to believe that Veterans United is an official government entity or a preferred partner of the VA.
The complaint further asserts that this perceived connection has unfairly benefited Veterans United by diverting business from other lenders and real estate professionals. Multiple real estate agents and loan officers reportedly claim they have lost potential clients because borrowers mistakenly believe they are obligated to use Veterans United due to its supposed ties to the VA. This narrative is particularly poignant given that the company was founded and is reportedly managed by individuals with no prior military service records, a detail highlighted in the original filing.
Veterans United’s Defense: Disclaimer and Lack of Injury
In its motion to dismiss, Veterans United has presented evidence aimed at refuting the plaintiffs’ claims. The lender has submitted screenshots of its website, including one from the original complaint and another from its recent filing. These images are intended to show that the company prominently displays a disclaimer stating it is not a federal agency. However, the plaintiffs’ legal team has pointed out that the disclaimer in the screenshot attached to the original complaint appeared smaller, suggesting a potential intent to obscure its significance.
The core of Veterans United’s legal argument rests on the assertion that the plaintiffs have not presented any "concrete and particularized injury." This legal standard requires plaintiffs to prove that they have suffered a direct and measurable harm as a result of the defendant’s actions. Without such proof, the lender argues, the lawsuit lacks the necessary foundation to proceed.
A Closer Look at the Alleged Violations: RESPA and Missouri Law
The class-action lawsuit encompasses homeowners who secured loans from Veterans United between 2022 and 2025. The primary legal framework cited by the plaintiffs is the Real Estate Settlement Procedures Act (RESPA), a federal law designed to protect consumers from abusive practices in the real estate settlement process.
The plaintiffs allege that Veterans United engages in a practice of distributing leads to a select group of preferred real estate agents and loan officers. These preferred partners, in turn, allegedly pay Veterans United a significant portion of their commission – reportedly around 35% of their fee, which is typically a percentage of the overall transaction cost. The implication is that agents who do not reciprocate by referring loan business back to Veterans United are cut off from receiving these valuable leads, creating a closed ecosystem.
Furthermore, the lawsuit claims that loans offered by Veterans United are inherently more expensive. This increased cost is attributed to higher interest rates and potentially other fees, suggesting that borrowers are not receiving the most competitive terms available in the market. This alleged financial disadvantage is a key component of the "injury" the plaintiffs aim to prove.
Veterans United’s Rebuttals: Exemptions, Deficient Pleading, and Jurisdictional Issues
Veterans United’s motion to dismiss systematically addresses each of the plaintiffs’ claims. Regarding RESPA, the lender argues that certain provisions of the act exempt cooperative brokerage and referral arrangements. They contend that the plaintiffs have failed to adequately plead the statutory requirements for liability under RESPA, specifically pointing to the absence of any clear evidence of a referral, a "thing of value" exchanged, or a direct charge paid by the plaintiffs related to such arrangements. The motion also suggests that some of the plaintiffs’ claims may have exceeded the one-year statute of limitations for certain RESPA violations.
The lender also refutes claims of quota violations, suggesting that the plaintiffs have made a generic allegation by copying and pasting language from other lawsuits without providing specific evidence of actual referral quotas being enforced.
Beyond RESPA, Veterans United challenges claims related to violations of the Missouri Merchandising Practices Act. The company asserts that the alleged transactions occurred outside of Missouri, thus negating the applicability of state law. Similarly, concerning a common-law unjust enrichment claim, Veterans United argues that the plaintiffs have not demonstrated that they conferred any benefit upon the defendants.
The motion further points out alleged inaccuracies in the lawsuit’s framing. Veterans United contends that the plaintiffs are seeking recovery for conduct that is governed by contractual agreements, and that their claims are fundamentally dependent on the flawed RESPA allegations. Additionally, the lender highlights a potential misidentification of a defendant, stating that Realty Search Solutions Network was the intended entity, not Realty Search Solutions. They also dispute the characterization of Veterans United Realty as a "shell company," asserting that it is a substantial firm employing numerous licensed agents.
Official Statements and Industry Context
Chad Moller, corporate communications manager at Veterans United, issued a strong statement to HousingWire, characterizing the lawsuit as "meritless" and "filled with nonsensical allegations." He further alleged that the complaints were "cut-and-paste" from other lawsuits filed against different mortgage lenders, suggesting a lack of originality and substance. Moller emphatically stated, "Veterans United Home Loans and Veterans United Realty have never held themselves out as the VA or any other government agency. Never."
The plaintiffs’ attorneys, from the firm Hagens Berman, have defended their filing, stating that their claims are based on extensive discussions with numerous real estate agents and loan officers across the country who have firsthand experience with VA home loans and the alleged practices of Veterans United. Steve W. Berman, managing partner and co-founder of Hagens Berman, stated at the time of the lawsuit’s filing that Veterans United had engaged in "blatantly illegal practices that have harmed homebuyers through predatory loan practices" and had attempted to "deceive our nation’s military servicemembers by masquerading as affiliated with the U.S. Veterans Administration."
Timeline of Events and Potential Implications
The class-action lawsuit was filed following an investigation into Veterans United’s business practices. The plaintiffs are homeowners who obtained loans from the company between 2022 and 2025. The motion to dismiss was filed on Monday in the U.S. District Court for the Western District of Missouri by Veterans United Home Loans, Realty Search Solutions (doing business as Veterans United Realty), and Mortgage Research Center.
The plaintiffs have been granted until the end of April to formally respond to the motion to dismiss, with the possibility of an extension. The original complaint states that the total amount in controversy in this case exceeds $5 million, underscoring the significant financial stakes involved.
This case is unfolding against a backdrop of increased scrutiny of the mortgage industry and its marketing practices. Notably, Hagens Berman is also representing clients in a separate case against Rocket Companies, which follows substantial settlements related to real estate brokerage commissions, totaling over $1 billion. The outcome of the Veterans United lawsuit could have significant implications for how mortgage lenders, particularly those with names or branding that might evoke government affiliation, conduct their marketing and referral practices. It also raises questions about consumer protection, especially for vulnerable populations like veterans who rely on specialized loan programs.
The legal battle will likely hinge on the court’s interpretation of the evidence presented by both sides, particularly regarding the clarity of Veterans United’s disclaimers and the extent to which the plaintiffs can prove concrete financial harm resulting from the alleged deceptive practices. The court’s decision on the motion to dismiss will set the stage for further proceedings or potentially bring the litigation to an early conclusion.
