Zillow Faces New Lawsuit Alleging RESPA Violations in Lead-Sharing Program
Zillow is again facing legal challenges, this time accused of violating the Real Estate Settlement Procedures Act (RESPA) through its lead-sharing programs. A new class-action lawsuit, Armstrong v. Zillow, alleges the company accepted undisclosed “kickbacks” from lenders in exchange for referring consumers, potentially inflating costs for homebuyers.
The suit seeks class certification for all U.S. consumers referred to Zillow Home Loans (ZHL) by participating agents, alongside treble damages under RESPA and a Washington state statute. Plaintiffs are also requesting an injunction to halt the alleged practices and restitution for any unlawfully obtained gains. This case arrives on the heels of Zillow’s 2023 settlement regarding its mortgage co-marketing program, which also centered on RESPA allegations.
The complaint echoes a separate 2025 class action filed by Hagens Berman and Cohen Milstein, which claims Zillow’s Flex model inflates homebuying costs by charging partner agents up to 40% of their commissions. If successful, Armstrong v. zillow could significantly impact lead-sharing programs throughout the real estate industry.
According to the complaint, “Zillow’s conduct, as alleged, falls squarely within the practices RESPA was designed to prohibit, kickbacks that distort competition, deceive consumers, and undermine trust in real estate portrayal.”
The core of the argument rests on whether access to leads constitutes a ”thing of value” under RESPA. If the court agrees, it could reshape how referral platforms and affiliated lenders operate, potentially forcing greater openness in lead-generation practices.Industry observers suggest this case is crucial to watch, as it could redefine the legal boundaries of referral relationships in real estate.
