The lawsuit, filed Oct. 3 in U.S. District Court in Nashville, accuses Optimal Blue and the lenders of violating federal antitrust laws, alleging that the defendants “exploited their control over the residential mortgage industry to orchestrate a price-fixing scheme that caused significant harm to the plaintiffs and the Class.”
The complaint names Optimal Blue, the former owner — Black Knight — and the current owner, Constellation softwaretogether with 26 lenders who collectively provided more than 7 million loans between 2019 and 2024.
Tyrrell disputes the premise of the lawsuit. “The complaint misrepresents Optimal Blue’s capabilities in an attempt to force this case into the mold of other ‘algorithmic pricing’ lawsuits; however, Optimal Blue’s products are in fact nothing like the products at issue in those cases. Our products do not provide any price or rate recommendation; our products are not pricing algorithms, and our marketplace clearly does not function in a manner that would determine an individual’s rates or a group of lenders determine what thousands of lenders are. other lenders choose to do.
“In fact, the foundation of our solution is designed to provide the best consumer prices first, and our products promote competition to that end. Plaintiffs’ claims indicate a clear lack of understanding of the Optimal Blue products and the industry in which they are used; they are not only false, they are absurd to everyone. [who] active in this industry.”
Tyrrell confirmed that the company has sought legal advice and is seeking an early dismissal of the lawsuit.
“In the meantime, we are confident that the industry will recognize this frivolous lawsuit for what it is and will continue to benefit from the increased transparency and competition provided by our products, which ultimately benefits consumers on their path to homeownership,” he added.
What the lawsuit claims
The lawsuit focuses on two tools launched in 2019 – Competitive Analytics and Competitive Data License – that allegedly required lenders to share detailed, non-public pricing data.
Plaintiffs say this arrangement allows lenders to monitor competitors’ rates in real time and raise prices without losing market share, eliminating normal competitive pressures.
According to the complaint, spreads on loans priced through Optimal Blue are nearly 50% higher than those of non-users, and 9.6 basis points higher than before lenders joined the platform. The alleged “cartel” scheme, prosecutors allege, has driven up mortgage costs in Nashville and across Tennessee. The plaintiffs are seeking damages and an injunction to stop the alleged practices.
Speaking to HousingWire, Tyrrell said what is alleged in the lawsuit directly contradicts the way the tools work.
“There really wasn’t anything that we felt we needed to address because it’s a complete misrepresentation of the way our software works. And I think what’s interesting is the industry, which knows us, knows how interest rates are set, knows how the software works, and it doesn’t make any recommendations,” he said.
Tyrrell argues that the tools “promote competition” and are not geographically based, contrary to the lawsuit’s claims. He also said several customers have provided feedback on the lawsuit and offered their support to Optimal Blue.
He added: “We intend to fight this to the hilt because it is clearly an absurd claim that is being made. The software does not work that way. The interest rates do not work that way. The mortgage market does not work that way. So we will go through all the appropriate steps that are necessary, but we will continue to fight.”
The plaintiffs’ lawyers may look familiar
The current lawsuit uses some of the exact language used to describe real estate brokers and broker associations in the commission lawsuits, alleging that the lenders who share information about their loans on Optimal Blue are part of a “cartel,” and that it is an example of “concerted action.”
But this lawsuit may have even more in common with a class action lawsuit filed against RealPage, as this lawsuit was filed by the attorneys for the same plaintiffs. And like the lawsuit against Optimal Blue, the RealPage lawsuit was also filed in the US District Court in Nashville.
Tyrrell acknowledged this, saying: “Our view is that this is based on a case that takes place in a completely different sector and has essentially been copied and pasted in the hope that it would be applicable to ours, but that is clearly not the case.”
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