"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."
Optimal Blue, previously owned by Black Knight and sold to Constellation Software as part of ICE's acquisition, and its former owner are named as defendants alongside 26 U.S. mortgage lenders that originated more than 7 million loans between 2019 and 2024. The case focuses on two 2019 tools that required lenders to share extensive non-public, granular, real-time pricing and margin data. Plaintiffs allege that the data-sharing functioned as the price of admission to a cartel, allowing coordinated pricing, higher rate spreads for platform users, and elevated monthly payments in Tennessee markets.
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