The latest developments involve a major expansion of a key lawsuit against Zillow for allegedly steering homebuyers to its in-house mortgage lender, Zillow Home Loans (ZHL). Additionally, a new, separate class action has been filed on similar grounds.
To be clear, a separate Federal Trade Commission (FTC) lawsuit filed in September 2025 accuses Zillow of making an illegal agreement with Redfin to reduce competition in the rental advertising market. This is not related to the home loan steering allegations.
Here are the details of the relevant lawsuits concerning home loan steering.
Key Lawsuits and Latest Updates
| Lawsuit / Case | Key Development & Date | Status & Allegations |
|---|---|---|
| Hagens Berman Class Action | Amended Complaint Filed (Nov. 19, 2025) | Active. Lawsuit expanded with insider accounts from 12 current/former Zillow agents/loan officers. Alleges a conspiracy with brokerages to steer buyers to ZHL, violating RICO and RESPA laws. |
| Armstrong RESPA Class Action | New Complaint Filed (Early Nov. 2025) | Active. Alleges Zillow’s Premier Agent/Flex programs constitute an illegal kickback scheme under RESPA, pressuring agents to refer clients to ZHL to keep access to quality leads. |
Specific Allegations of Steering and “Burning and Churning”
The lawsuits detail several concerning practices, many supported by recent insider testimony:
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- Enforcing Loan Referral Quotas: Agents in the “Zillow Flex” program are allegedly given ZHL pre-approval quotas. To avoid written records, managers are said to fly to agent offices to deliver these instructions in person.
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- Tying Leads to Loan Referrals: Agents who generate more ZHL business are reportedly rewarded with more and higher-quality homebuyer leads, while those who don’t risk being removed from the program.
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- Monitoring and Censoring Agents: Agents are required to use Zillow’s “Follow-Up Boss” software, which allegedly allows Zillow to monitor communications and “catch” agents who recommend other lenders.
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- Prioritizing Volume Over Clients: The lawsuits allege ZHL “cherry-picks” only the most qualified borrowers because its loan officers are inexperienced and incentivized to “burn and churn” through as many clients as possible without regard for their best interests.
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- Misleading Consumers: Homebuyers report feeling they were obligated to use ZHL, and agents allegedly fail to disclose better-suited loan options, like first-time homebuyer programs.
What Happens Next & Potential Outcomes
Zillow has stated it intends to “vigorously defend” against these allegations. The legal process will take time, but the potential outcomes for Zillow include:
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- Financial Penalties: Significant damages or settlements paid to affected homebuyers.
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- Court Orders: Injunctions forcing Zillow to change its business practices, such as decoupling agent leads from ZHL referrals.
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- Regulatory Action: Increased scrutiny from regulators like the Consumer Financial Protection Bureau (CFPB).
What This Means for You
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- For Homebuyers: If you are using a Zillow agent, know that you are not obligated to use Zillow Home Loans. You have the right to shop for mortgages from multiple lenders to find the best rate and terms for your situation.
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- For Agents: These lawsuits highlight the legal risks of programs that tie client referrals directly to specific service providers, potentially conflicting with an agent’s fiduciary duty.
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- To Stay Updated: You can monitor this case by searching for “Hagens Berman v. Zillow” or “Armstrong v. Zillow” in federal court records (Western District of Washington). Legal news websites and the law firm’s own press page are also good sources for updates.
I hope this breakdown of the latest legal actions is helpful. If you’d like me to explain any specific allegation or legal term in more detail, just let me know.