Borrowers Sue Optimal Blue, Top Lenders Over Alleged Mortgage Price-fixing Scheme

A class-action lawsuit filed in early October in Tennessee accuses software company Optimal Blue and some of the nation’s largest lenders of violating federal antitrust laws through an alleged mortgage price-fixing scheme.

According to the complaint, filed Oct. 3 in a U.S. district court in Nashville, the defendants “exploited their control of the residential mortgage industry to orchestrate a price-fixing scheme that has inflicted substantial damages on Plaintiffs and the Class.” 

The plaintiffs are borrowers who obtained mortgages between 2022 and 2025.

Optimal Blue was previously owned by Black Knight before being sold to Constellation Software as part of Intercontinental Exchange’s (ICE) acquisition of Black Knight. Both the current and former owners are named as defendants, alongside 26 U.S. mortgage lenders that originated more than 7 million loans between 2019 and 2024.

In a statement, Optimal Blue stated, “We are aware of the lawsuit filed against Optimal Blue and many of the top lenders in the industry.  We do not agree with the assertions made by the Plaintiffs in this case, and we are confident that we can demonstrate how Optimal Blue’s products actually foster competition in the mortgage industry.  Until we work through the legal process to disposition this appropriately, we can provide no further comment.”

The crux of the lawsuit

The lawsuit centers on two Optimal Blue tools launched in 2019, Competitive Analytics and Competitive Data License, which require lenders to share “an unprecedented quantity and quality of non-public, competitively sensitive, granular, real-time data covering every component of their residential Mortgage Pricing and profit margins.”

Plaintiffs allege this data-sharing arrangement – the “price of admission to this cartel” – allowed lenders to coordinate pricing rather than compete, effectively inflating rates and margins. The platform provides real-time visibility into competitors’ pricing, including loan margins, pricing adjustments, concessions and loan officer compensation, which would not exist in a truly competitive market, they claim. 

“When Loan Originators discover they are pricing below rivals, they raise margins without risking market share loss,” the complaint continues.” Because lenders monitor competitors’ prices in near real-time, downward pricing pressure evaporates.”

According to the lawsuit, rate spreads — the difference between the annual percentage rate and the Consumer Financial Protection Bureau’s prime rate — for mortgages issued by Optimal Blue clients were 2.68 basis points (49.2%) higher than for non-users. Compared with their own rates prior to joining the platform, lenders’ spreads were 9.6 bps higher, even after controlling for pandemic effects and other factors. 

The plaintiffs claim the alleged “cartel” has distorted mortgage pricing in Nashville and across Tennessee, where monthly payments have surged. The lawsuit notes that average monthly payments rose to $1,657 in 2024, up $628 from 2022.

Optimal Blue allegedly dominates the pricing engine market, powering 68% of the top 500 mortgage lenders in the U.S. and pricing about 40% of all residential mortgages annually. The platform reportedly serves around 3,500 lenders. 

Plaintiffs seek damages and permanent injunctive relief.