Optimal Blue comes out swinging on price-fixing lawsuit

Optimal Blue has responded to a class action lawsuit filed against it and 26 mortgage lenders, calling the claims “baseless” and “frivolous” and vowing to fight the lawsuit “all the way through.”

“Optimal Blue is aware of the complaint filed against it, Black Knight, Inc., and many of the largest mortgage lenders, alleging a purported conspiracy to increase rates through the use of Optimal Blue’s products,” said Optimal Blue CEO Joe Tyrrell in exclusive commentary to HousingWire. “The claims made are obviously baseless and without merit. We will vigorously defend ourselves against these false allegations and are confident that the facts will show that Optimal Blue’s products actually bring transparency and greater competition to the mortgage industry.” 

Filed on Oct. 3 in U.S. District Court in Nashville, the suit accuses Optimal Blue and the lenders of violating federal antitrust laws, alleging that 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 complaint names Optimal Blue, its former owner — Black Knight — and its current owner, Constellation Software, along with 26 lenders that collectively originated more than 7 million loans between 2019 and 2024.

Tyrrell disputes the premise of the suit. “The complaint misrepresents the capabilities of Optimal Blue in an effort to force this case into the template 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 pricing or rate recommendations; our products are not pricing algorithms, and our market obviously doesn’t operate in a manner where the rates of any individual or group of lenders determine what thousands of other lenders choose to do. 

“In fact, the foundation of our solution is designed to present the best consumer pricing first, and our products foster competition to that end. Plaintiffs’ allegations indicate a clear lack of understanding of the Optimal Blue products and the industry in which they are used; they are not just false, they are absurd to anyone [who] operates in this industry.”

Tyrrell confirmed that the company has retained legal counsel and seeks a swift dismissal of the suit.

“In the meantime, we are confident that the industry recognizes this frivolous lawsuit for what it is and will continue to leverage the greater transparency and competition provided by our products, which ultimately benefits consumers on their path to homeownership,” he added.

What the suit alleges

The suit focuses on two tools launched in 2019 — Competitive Analytics and Competitive Data License — that allegedly required lenders to share detailed, nonpublic pricing data.

Plaintiffs say this arrangement let lenders monitor competitors’ rates in real time and raise prices without losing market share, erasing normal competitive pressure.

According to the complaint, loans priced through Optimal Blue carried rate spreads nearly 50% higher than those from non-users, and 9.6 basis points higher than before lenders joined the platform. The alleged “cartel” scheme, plaintiffs claim, has driven up mortgage costs in Nashville and across Tennessee. Plaintiffs are seeking damages and an injunction to stop the alleged practices.

Speaking to HousingWire, Tyrrell said that what is being alleged in the suit directly contradicts how the tools work.

“There really wasn’t anything that we felt we needed to address, because it’s a complete misstatement in their filing of how 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 that it does not provide any sort of recommendation,” he said.

Tyrrell argues that the tools “breed competition” and are not geographically based, contrary to the suit’s allegations. He also said that several customers have offered feedback on the lawsuit and offered their support to Optimal Blue.

He added, “We intend to just fight this all the way through, because obviously it’s an absurd claim that’s being made. The software doesn’t work that way. Interest rates don’t work that way. The mortgage market doesn’t work that way. So we’ll go through all the appropriate steps that we need to, but we will continue to fight.”

Plaintiffs’ attorneys may look familiar

The current lawsuit uses some of the exact language used to describe real estate brokerages and Realtor association in the commission lawsuits, claiming that the lenders who share information about their loans on Optimal Blue are part of a “cartel,” and that it’s an example of “concerted action.”  

But this lawsuit may have even more in common with a class-action lawsuit filed against RealPage, considering this suit was brought by the same plaintiffs’ attorneys. And like the suit against Optimal Blue, the RealPage suit was also filed in U.S. District Court in Nashville.

Tyrrell acknowledged this, saying, “Our opinion is that this is based upon a case that’s taking place in a completely different industry that was essentially copied and pasted, hoping it would be applicable in ours, and it’s obviously not.”