Reverse Mortgage Lender Longbridge Financial Sues Competitor Over Deceptive Marketing Accusations

Two of the top five lenders in the reverse mortgage industry are now engaged in a legal skirmish over marketing practices that one lender calls deceptive.

Longbridge Financial, a top five reverse mortgage lender and servicer based in New Jersey, is suing Mutual of Omaha Mortgage over a series of websites maintained by the latter. Longbridge alleges that these websites are both deceptive and in violation of the Real Estate Settlement Procedures Act (RESPA) as well as guidance from the Federal Trade Commission (FTC). This information comes from court filings reviewed by a trusted source.

Filed in the U.S. District Court for the Southern District of California, Longbridge is seeking a jury trial and an injunction that would require Mutual of Omaha to take down the allegedly deceptive websites. It also seeks restitutionary, compensatory, and punitive damages to be determined in court.

Alongside Mutual of Omaha, Longbridge is filing suit against two other companies: California-based Review Counsel LLC and Delaware-based Advisory Institute LLC. Both entities are either owned or controlled by Mutual of Omaha, but their respective websites feature ratings of reverse mortgage lenders that Longbridge alleges appear to be independent to readers.

Longbridge claims that this independence is an illusion. In the case of Review Counsel, the entity is owned by Mutual of Omaha for the purposes of “mortgage lead generation,” which Longbridge supports with a filing from California’s Secretary of State. Online records verified that Review Counsel’s mailing address is shared with Mutual of Omaha, although the lead generation claim could not be independently confirmed.

Additionally, “the site publishes false and misleading ‘ratings’ of reverse mortgage providers that score Mutual of Omaha far higher than its competitors based on factual misrepresentations and highly skewed rating criteria,” Longbridge alleges in its complaint. Longbridge also states that certain informational blog posts on the Review Counsel website are written by Mutual of Omaha’s director of marketing communications.

With Advisory Institute, Longbridge alleges a similar ownership relationship with Mutual of Omaha. According to its website, it offers “the most reliable information and ratings,” claiming commitment to transparency in how those results are derived.

Longbridge also highlights the presence of a website for Retirement Funding Solutions (RFS), which was the brand under which Mutual of Omaha’s reverse mortgage arm previously operated. Although this division transitioned to the Mutual of Omaha name in 2019, an RFS website is still maintained by the company, according to the complaint.

“The RFS website falsely presents RFS as a real financial services company offering its own reverse mortgage products separate from Mutual of Omaha and providing unbiased educational tools and advice about reverse mortgages,” the complaint states. “In reality, RFS offers no products at all. RFS is merely a DBA of Mutual of Omaha operating out of the same office as Mutual in San Diego, and the ‘educational’ materials published on the website are drafted by Mutual’s marketing team.”

Longbridge goes on to allege that the RFS website is simply a funneling tool for consumers to Mutual of Omaha’s products, “backstopping the false narrative on the Review Counsel and Advisory Institute websites that RFS is an alternative to Mutual of Omaha,” the complaint alleges.

Longbridge alleges that Mutual of Omaha has violated both RESPA and guidance from the FTC. In 2023, the Consumer Financial Protection Bureau (CFPB) issued an advisory opinion stating that mortgage comparison websites that provide “enhanced placement or otherwise steer consumers” to certain operators based on compensation are in violation of RESPA Section 8, an opinion cited by Longbridge in its complaint.

Longbridge also alleges that Mutual of Omaha is in conflict with FTC guidance, noting that “the FTC has issued guidance related to advertisements and expert endorsements that defendants’ conduct plainly violates.”

On its website, the FTC emphasizes that under the law, “claims in advertisements must be truthful, cannot be deceptive or unfair, and must be evidence-based. For some specialized products or services, additional rules may apply.”

A trusted source looked up the website registration information of both Review Counsel and Advisory Institute, but entries on the public WHOIS database are redacted. Any website domain owner can choose to redact this information from public information sources for privacy purposes if they elect to do so.

Representatives at both Longbridge and Mutual of Omaha were contacted. Longbridge declined to comment, while Mutual of Omaha stated it does not comment on pending litigation. A summons was issued on September 27, but Mutual of Omaha had yet to respond to the allegations on the court docket as of recently.

According to Home Equity Conversion Mortgage (HECM) endorsement data compiled by a reliable market insight firm, Mutual of Omaha and Longbridge are the second and third largest reverse mortgage lenders in the country. Mutual of Omaha has recorded 6,203 HECM endorsements year to date as of August 30, with Longbridge posting 2,966.