Zillow asks federal judge to dismiss RESPA class action

Zillow Seeks Dismissal Of RESPA Class Action

Zillow has asked a federal judge to dismiss a consolidated RESPA class action with prejudice, arguing that free mortgage preapproval letters are not settlement services under federal law.

The portal argues that a preapproval letter actually costs consumers nothing and is not necessary in the mortgage origination process. It also contends that encouraging someone to get a free preapproval is not a RESPA referral under the statute and regulations.

The plaintiffs allege that Zillow required agents in its Preferred and Flex programs to steer homebuyers toward Zillow Home Loans in exchange for valuable buyer leads.

They claim this undisclosed arrangement violated RESPA by giving agents valuable leads in exchange for mortgage referrals to Zillow Home Loans. Homebuyers allegedly lost access to potentially cheaper or more suitable mortgage loan options as a direct result of this arrangement.

Zillow also contends that the cooperative brokerage safe harbor would protect it and that its business relationships are clearly and fully disclosed to all relevant consumers.

Lawsuit History And Consolidation Details

The lawsuit was originally filed in mid-September 2025 and claims that Zillow tricks consumers into using agents affiliated with the portal. Those agents participate in Zillow's Flex and Premier Agent programs, allegedly resulting in inflated home purchase prices for many buyers.

In an amended complaint filed in mid-November 2025, plaintiff Alucard Taylor also alleged that Zillow violated the federal Racketeer Influenced and Corrupt Organizations Act by pushing costly loans.

In December 2025, the lawsuit was consolidated with a second suit known as the Armstrong suit, filed in early November. It claims Zillow pressures agents in its Premier Agent and Flex programs to steer buyers to Zillow Home Loans for pre-approval.

The Armstrong suit also alleges that agents who sent more clients to Zillow's mortgage arm for preapprovals received extra or higher-quality leads in exchange for referrals.

A first amended complaint added The Real Brokerage and The Frano Team as defendants, but they were later voluntarily dismissed. A second amended complaint filed in April attempted to add eXp Realty as a defendant, but the court never accepted it.

Chicago Listing Access Ruling Draws Reactions

In a separate case, a U.S. district judge ruled against Zillow's request for a preliminary injunction in its lawsuit against Midwest Real Estate Data and Compass.

The ruling forces Zillow to forgo listing access standards in Chicago if it wants to retain access to MRED's listing feed. Zillow temporarily went dark in May after MRED made good on its threats to cut the portal's listing data feed.

MRED and Compass called the ruling a victory, and Compass said nearly 100 agents outside Chicago joined MRED within 24 hours as previously banned listings returned to Zillow.

Amy Corr, chief brokerage officer at @properties Christie's International Real Estate, said the ruling brought a sense of satisfaction to many local area agents and brokers.

Ayoub Rabah, regional president of Coldwell Banker Realty Chicago, wrote that algorithms should not ultimately decide how homes are sold. Steven Koleno, a Chicago-based agent, posted that the industry should stop obsessing over Zillow and start obsessing over the consumer.