Homebuyers sue D.R. Horton for alleged deceptive lending

"Plaintiffs aim to stop what they describe as a predatory scheme that encouraged homebuyers to purchase more expensive homes with larger mortgages. Litigation also seeks to recover all financial losses for affected homeowners. Under the Racketeer Influenced and Corrupt Organizations (RICO) Act, homeowners could be entitled to triple their out-of-pocket losses, the National Consumer Law Center said. According to the complaint, D.R. Horton and DHI Mortgage allegedly misled prospective homebuyers by advertising low monthly payments that excluded the majority of required property taxes significantly understating the true costs of homeownership."

"The lawsuit alleges that D.R. Horton and DHI Mortgage were running a Monthly Payment Suppression Scheme' to mislead first-time homebuyers into thinking their total monthly housing costs would fit their budgets, said Jennifer Wagner, senior attorney at the National Consumer Law Center. They preyed on people's faith in the American Dream of homeownership to lure them into unaffordable, deceptive deals."

"One plaintiff, Frankie Santiago, was told his monthly payment for a D.R. Horton home in Lake County, Fla., would be $2,164.68. Based on that figure, he selected the home and mortgage offered by DHI Mortgage, believing it was the most affordable option, the complaint said. But less than a year after closing, his new mortgage servicer conducted an escrow analysis that included full property taxes and back payments."

Plaintiffs aim to stop a predatory scheme that encouraged homebuyers to purchase more expensive homes with larger mortgages and to recover all financial losses for affected homeowners. Under RICO, homeowners could be entitled to treble out-of-pocket losses. The complaint alleges D.R. Horton and DHI Mortgage advertised low monthly payments that excluded most required property taxes, significantly understating true homeownership costs. The companies allegedly ran a "Monthly Payment Suppression Scheme" to mislead first-time buyers into thinking housing costs would fit budgets. Many homeowners allegedly discovered true costs only after closing when loans were sold and escrow analyses added full taxes and back payments. Plaintiffs seek damages and injunctive relief.

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