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A lawsuit over allegedly deceptive and misleading advertising practices between two of the reverse mortgage industry’s leading players saw a new development this week. Mutual of Omaha Mortgage amended its counterclaim that alleges deceptive advertising practices against Longbridge Financial.
In a suit originally brought by Longbridge in September 2024, Mutual of Omaha responded in January by filing a counterclaim that alleges “tortious interference,” as well as violations of California’s Unfair Competition Law (UCL). But last month, in a joint filing with Longbridge, the company requested that the presiding judge allow the company to amend its counterclaim with a deadline of March 7.
The presiding judge agreed to the request, and Mutual of Omaha filed its amended counterclaim this week. The amended claim, which stems from a discussion between the two parties, focuses primarily on what Mutual of Omaha calls Longbridge’s alleged violations of the UCL.
Amended counterclaim
Longbridge alleges that Mutual and its co-defendants violated the Real Estate Settlement Procedures Act (RESPA). It claims that certain review websites, one of which Mutual admitted to owning, are deceptive.
In the amended counterclaim, Mutual said in its filing that “this is not in any way a RESPA violation — of course paying to advertise, which is permitted under RESPA, can impact how the advertiser appears on the advertising page of a website.” But Mutual also “conditionally assert[s]” that if RESPA applies to this type of activity, then Longbridge’s conduct would be a greater violation.
Unlike the websites that Longbridge pays for advertising placement on, the websites highlighted in the original complaint (Review Counsel and Advisory Institute) do not “alter the order in which reverse mortgage companies are displayed on their Ratings pages, which is the page in which Review Counsel and Advisory Institute assign ratings to companies,” attorneys for Mutual said.
“Instead, the ratings pages list companies alphabetically and not in order of who provides advertising.”
Putting a finer point on their allegations, Mutual attorneys state that “whether a company advertises does not affect that company’s rating or the order in which the companies are presented on the ratings pages,” the filing reads.
“In contrast, […] Longbridge expressly pays to be featured at or near the top of the list of the rankings pages on the purportedly independent third-party comparison websites on which Longbridge advertises.”
Presuming RESPA applies to this activity, which Mutual denies, it alleges that Longbridge is in fact the party that has violated RESPA, claiming that it “pays websites for enhanced placement on other websites’ rankings pages.”
Website placement allegations
In its legal strategy, Mutual counters by citing the same guidance from Longbridge’s original complaint. In 2023, the Consumer Financial Protection Bureau (CFPB) issued an advisory opinion, stating that mortgage comparison websites that provide “enhanced placement or otherwise steers consumers” to certain operators based on compensation are in violation of RESPA Section 8.
In the original complaint, Longbridge alleged that one of the websites at issue fits the criteria for a “digital mortgage comparison-shopping platform.” Mutual disputes this by saying “it does not compare specific mortgages or other settlement services.”
Mutual added that “the ratings page does not allow any interaction by a consumer. Therefore, no part of ReviewCounsel.org is ‘directed to a person’ in the manner that the 2023 CFPB opinion contemplates, and therefore does not constitute referral activity.”
Mutual goes on to cite Longbridge’s presences on three different websites — BestMoney.com, Money.com and MortgageLendersComparison.com. Mutual alleges that Longbridge paid for higher placement “upon information and belief” in violation of RESPA and the cited CFPB opinion.
Two of the websites brought up by Mutual (Best Money and MortgageLendersComparison) also use the same Delaware-based physical address. Mutual said that “upon information and belief, Longbridge is knowingly advertising on two websites that purport to be separate but that are not separate.”
Its alleged placement on Money.com also prioritizes higher ranking placement. The attorneys allege this “constitutes an illegal referral under RESPA because Money.com non-neutrally presents information in a way that influences or steers the consumer and, upon information and belief, Longbridge pays for such presentation” under the presumption that RESPA applies.
Sought remedies, next deadlines
Mutual of Omaha is asking the court to enter an injunction against Longbridge, “prohibiting it from engaging in unlawful and unfair conduct with respect to advertising on websites and lodging complaints with private third parties.” It also seeks a jury trial, attorneys fees and pre- and post-judgment interest on any awarded damages.
Longbridge has not yet responded to the amended counterclaim as of Friday evening. It previously filed a motion for a preliminary injunction seeking to take down material it contends is deceptive and misleading from websites that it claims unfairly steer reverse mortgage business toward Mutual. The response deadline is March 28.
In February, a hearing date on this motion was pushed from March 14 to April 14. A prior filing indicated that the companies may be attempting to reach a settlement.
HousingWire‘s Reverse Mortgage Daily (RMD) contacted each company at the time the original complaint was filed. Longbridge declined to comment, while Mutual of Omaha said it does not comment on pending litigation.
