According to HousingWire, a private class action lawsuit brought by veterans and military family members against Veterans United is reshaping how the industry thinks about compliance and risk. The borrowers, represented by Hagens Berman, alleged that the lender's agent referral program operated as a steering mechanism where agents who directed business to the lender were rewarded with ongoing lead flow. What makes this case significant is not necessarily the allegations themselves, but rather who brought it: private plaintiffs and their lawyers, not the Consumer Financial Protection Bureau, Department of Justice, or state regulators.
This shift reflects a larger change in the enforcement landscape that accelerated after the Sitzer/Burnett decision in late 2023, when a jury found the National Association of Realtors and major brokerages liable for commission inflation without any government regulator bringing the case. That victory opened the eyes of the plaintiffs' bar to the value of housing industry disputes. The same firms that won that case now understand referral programs, lead generation, and the paper trails that support them. That knowledge does not disappear after one settlement; it gets applied to the next target.
The consequences are visible across the industry right now. The CFPB spent four years investigating Rocket's agent referral practices, sued in December 2024, then dropped the case within weeks. One month later, the same plaintiffs' firm filed a private RESPA class action alleging identical conduct against Rocket. Veterans United came next, followed by similar actions against loanDepot, CrossCountry Mortgage, Zillow Home Loans, and others. Price-fixing allegations against multiple lenders using the same pricing engine are stacking up in federal courts as well.
The business logic that once guided compliance has changed. For years, industry participants reasoned that programs running for a decade without regulator objection were safe. But regulators have discretion; they can decline to investigate, change course after elections, or close cases for policy reasons. Private plaintiffs operate under no such constraints. One borrower inside the statute of limitations, one preserved group text, or one agent cut off from leads after recommending a competitor can trigger litigation that ends up in headlines and discovery.
The practical response, according to HousingWire's analysis, means reviewing every referral program, lead agreement, and affiliated business arrangement from the perspective of an opposing counsel rather than an examiner. The examiner wants to see the documentation and policies are in place. The plaintiff's lawyer wants to establish that borrowers suffered harm, regardless of how the agreement was structured. Companies should trace where money moves, ensure payments correspond to genuine services, eliminate vague arrangements that could appear to be disguised referral fees, and scrutinize what happens to an agent's leads when they send business elsewhere.
What I am seeing locally here in the Bay Area and across the East Bay is that brokers and lenders need to rethink how they're approaching partnerships and referral arrangements. This is not about complying with what an examiner might approve; it's about building programs that could withstand a plaintiff's discovery process and a jury's common sense. The days of "nobody objected so it must be fine" are behind us, and I'm counseling my referral partners that this shift is permanent.
