Veterans United Lawsuit Advances: Judge Preserves Key RESPA Kickback Allegations

A federal judge has narrowed a significant class-action lawsuit against Veterans United Home Loans but has allowed crucial Real Estate Settlement Procedures Act (RESPA) claims regarding alleged kickbacks and fee-splitting to proceed. U.S. District Court Judge Willie J. Epps Jr., presiding in the U.S. District Court for the Western District of Missouri, issued an order on August 21, 2026, dismissing several state consumer protection counts and most RESPA claims as “time-barred” for three initial borrowers, according to HousingWire. However, the judge's decision ensures that the core allegations of an illegal kickback and steering operation will move forward into discovery.

What are the core allegations against Veterans United?

The lawsuit, originally filed on February 18, 2026, by three military veterans—Christian Peyton, Salem Zahn, and Ernest Easter—and later expanded to 15 plaintiffs, centers on allegations of an illegal kickback and steering scheme. The plaintiffs accuse Veterans United, through its affiliated real estate brokerage, Veterans United Realty, of operating a “self-reinforcing scheme designed to trap borrowers in a closed loop of referrals and overpriced lending.”

The central claim, as reported by Inman and detailed in press releases from Hagens Berman, the law firm representing the plaintiffs, is that Veterans United provides pre-qualified buyer leads to a network of over 5,000 real estate agents. In exchange, these agents allegedly pay “roughly 35 percent” of their commission back to Veterans United when a deal closes. Agents are reportedly expected to steer clients exclusively to Veterans United for their mortgage, with those who do not comply allegedly facing removal from the referral network. The lawsuit also claims Veterans United’s branding is “deliberately misleading,” suggesting an affiliation with the U.S. Department of Veterans Affairs (VA) when it is a private, for-profit company.

Who is affected by this lawsuit?

The proposed class in the lawsuit covers all borrowers who financed a home purchase through Veterans United since January 1, 2020. This encompasses potentially “hundreds of thousands of people,” according to the plaintiff’s attorneys. The amended complaint, filed May 6, 2026, also includes testimony from six confidential loan officers and five real estate agents, supporting the claims that veterans faced higher interest rates, steeper closing costs, and fewer financial assistance options due to the alleged scheme.

Steve Berman, managing partner and co-founder of Hagens Berman, stated that “These mortgage companies should be ashamed of their underhanded business tactics and are wholly unaffiliated with the military.” An anonymous loan officer cited in the lawsuit referred to Veterans United's loan options as a “significant disservice” to active military members and veterans due to these higher costs.

What does this mean for the Veterans United lawsuit?

Judge Epps Jr.’s decision to preserve key RESPA Section 8 kickback and fee-splitting allegations means the lawsuit will now proceed to the discovery phase. This stage involves both sides exchanging information and evidence relevant to the case. The claims that were dismissed as “time-barred” typically refer to those filed beyond the statutory limit for legal action. While the amended complaint increased the number of claims from 4 to 8, including consumer protection claims in five states, the specific details of which state claims were dismissed are not fully available in current reports.

This lawsuit marks a significant development in the real estate industry. Hagens Berman has a history of major real estate litigation, including settlements exceeding $1 billion against major real estate broker franchises for allegedly inflating commissions. The firm is also actively pursuing claims against Zillow and Rocket. BELLINGS referenced the HousingWire report, noting this case is considered the “first major lawsuit targeting mortgage lender steering practices and RESPA violations in post-NAR settlement era; expands commission litigation from real estate to mortgage lending.”

What is Veterans United's response to the allegations?

Veterans United, officially Mortgage Research Center LLC, doing business as Veterans United Home Loans, and its affiliates Realty Search Solutions LLC and Realty Search Solutions Network LLC (Veterans United Realty), have maintained that the allegations are unsubstantiated. In response to the amended complaint, Veterans United called it “volume and hyperbole, not substance.” The company had also filed a motion to dismiss in April 2026, arguing that the plaintiffs failed to present “any concrete and particularized injury.”

What happens next for the case?

With the core RESPA claims preserved, the lawsuit will now move into discovery, allowing both parties to gather further evidence. While no specific future court dates or deadlines for responses have been explicitly mentioned in available reports, this phase is crucial for developing the case before any potential trial or settlement discussions. The outcome could set a precedent for how mortgage lenders and their affiliated real estate services operate, particularly concerning referral networks and commission structures.