Amended class-action lawsuit accuses Veterans United of ‘bait-and-switch’ tactics

Plaintiffs filed an amended complaint against Veterans United Home Loans, owned by Mortgage Research Center, adding claims of “bait-and-switch” and misleading advertising tactics, according to court filings reviewed by HousingWire. 

The original complaint filed in February alleges the lender misled homebuyers into believing it is connected to the U.S. Department of Veterans Affairs (VA), while also distributing leads to preferred agents who, upon closing a home sale, pay the company roughly 35% of their commission. Agents who do not refer loans back allegedly stop receiving leads.

The plaintiffs claim Veterans United loans are more costly and carry higher interest rates than other lenders. The lender filed a motion to dismiss in April, saying plaintiffs failed to present “any concrete and particularized injury.”

The amended complaint filed on Monday, however, describes a “bait-and-switch” tactic in which the lender would initially offer artificially favorable, non-fixed terms during the shopping phase to attract borrowers, only to raise the costs and interest rates later at the “lock” phase.

Borrowers often proceed anyway, believing they’re dealing with the VA or because they have already paid money they will forfeit if they lose the house, the lawsuit states. Supporting documents from a confidential loan officer show a case where the rate increased by 0.25% in just three days despite market conditions improving.

“The mortgage market demonstrably improved during this three-day period by about .25%. Veterans United’s practice of blaming ‘market conditions’ for an increase in rates is demonstrably false,” the lawsuit states.

In response, Chad Moller, corporate communications manager at Veterans United, said the amended complaint “adds volume and hyperbole, not substance.”

“We intend to vigorously defend ourselves from these meritless claims,” Moller said. “Veterans United Home Loans and Veterans United Realty have never held themselves out as the VA or any other government agency.”

The company was founded and is run by three individuals with no military service records, the original complaint states. Moller adds that the lender’s name “was never a problem until a class-action attorney needed it to be.”

“We frequently tell our customers that we are not a government agency or part of the VA, and we appreciate the plaintiff’s class-action attorneys identifying in the complaint more than a dozen examples of where we do so,” Moller added.

The amended complaint brings 15 plaintiffs (up from three in the original) and eight claims (compared to four previously). These include two counts of Real Estate Settlement Procedures Act (RESPA) violations, violations of consumer protection laws in five states (Missouri, Illinois, New York, Ohio and Texas) and unjust enrichment. They also bring expanded testimonies from six confidential loan officers and five real estate agents.

The case is in the U.S. District Court for the Western District of Missouri against Veterans United, Realty Search Solutions, Realty Search Solutions Network (d/b/a Veterans United Realty) and Mortgage Research Center.

The plaintiffs are homeowners who obtained loans from Veterans United between 2018 and 2025. They are represented by Hagens Berman, who had clients in cases involving Zillow and Rocket Companies, following settlements tied to real estate brokerage commissions that totaled more than $1 billion.