Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.
eXp added as a defendant in Zillow RESPA case
According to an amended complaint filed last week in Taylor v. Zillow, eXp Realty has been added as a defendant, being accused of supporting the “Zillow Fraudulent Business Enterprise.”
According to the filing, eXp’s official YouTube channel has at least 10 videos promoting Zillow Flex.
The case, composed of two consolidated class-action lawsuits filed late last year, makes two primary allegations: that Zillow unlawfully steers buyers toward its home loan programs, and that the practice directing buyer inquiries to agents who paid for leads is “deceptive” and violates consumer protection statutes. Zillow has denied these claims.
In a response filed April 17, Judge James L. Robart ordered the plaintiffs to show cause by this Friday, April 24, to avoid the court striking its consolidated second amended class-action complaint.
Separately—in a reply brief filed by two other defendants in the lawsuit (Real Brokerage and Florida-based Frano Team) in support of their motion to compel arbitration of claims brought by one of the plaintiffs, who purchased a Florida home through a Real Broker agent—defendants argue Real Broker is expressly named as a party in the arbitration agreement and that Frano Team may enforce that agreement under Florida precedent.
Those two defendants are asking the court to compel arbitration and pause the case against them while that process plays out.
Veterans United seeks dismissal of RESPA class-action suit
A class-action lawsuit filed in the Western District of Missouri accuses Veterans United Home Loans of falsely presenting itself as affiliated with the U.S. Department of Veterans Affairs and running an illegal kickback scheme in which affiliated real estate agents pay roughly 35% of their commissions back to Veterans United in exchange for receiving buyer leads.
Plaintiffs allege the arrangement steered them into more costly loans with higher interest rates than they could have obtained elsewhere, in violation of RESPA.
In its motion to dismiss, Veterans United argues the RESPA rule exempts cooperative brokerage referral arrangements, and that plaintiffs failed to plead the statutory requirements for liability, including any referral, thing of value or charge paid by them.
The company also argues plaintiffs sued the wrong entity and incorrectly characterized Veterans United Realty as a shell company when it actually employs hundreds of licensed agents.
Veterans United flatly denied ever holding itself out as the VA or any government agency, calling the lawsuit “meritless” and filled with allegations copied from unrelated cases against other lenders.
New York Comptroller urges shareholders to reject eXp’s Texas reincorporation
In late February, eXp Founder and CEO Glenn Sanford announced the company would reincorporate in Texas, seen as a more company-friendly jurisdiction that limits shareholders’ ability to hold leadership accountable.
In early January, a judge in Delaware refused to dismiss a shareholder lawsuit against eXp World Holdings, which alleges that top agents Michael Bjorkman and David Golden spent years drugging and sexually assaulting women at company events, and that senior leadership failed to respond appropriately when reports reached them.
New York State Comptroller Thomas DiNapoli called the timing of the move “highly suspect,” arguing it appears designed to shield leadership from accountability.
DiNapoli urged shareholders to vote against the Texas reincorporation at the company’s annual meeting this Friday, April 24.
Trump’s DOJ plans to settle Colony Ridge case without compensating victims
The Biden Department of Justice (DOJ) sued Colony Ridge, a Texas land developer in the Houston area, in 2023, accusing it of luring tens of thousands of Hispanic residents into predatory high-interest mortgages through false advertising, then profiting when they foreclosed on their properties.
The Trump administration’s proposed $68 million settlement provides zero dollars to victims, instead directing $20 million to policing and immigration enforcement. Former DOJ and Consumer Financial Protection Bureau (CFPB) officials called the deal unprecedented and deeply flawed, noting it is the largest civil rights lending case since at least 2018, to include no victim compensation.
The settlement does require Colony Ridge to adopt stricter lending standards, make $48 million in infrastructure upgrades and pause new development for three years, though critics call these concessions inadequate.
A federal judge must still approve the deal and victims have filed briefs urging the court to reject it and award compensation.
