The federal judge overseeing the case brought by reverse mortgage lender Longbridge Financial against market leader Mutual of Omaha Mortgage over allegedly deceptive advertising practices has ruled that some of Longbridge’s claims warrant limited injunctive relief, finding that “the law and facts clearly favor some of Longbridge’s claims.”
The order was handed down Tuesday by Judge Dana M. Sabraw, an appointee of President George W. Bush, in the U.S. District Court for the Southern District of California. Longbridge filed the suit last fall, alleging that a series of advertising websites are deceptive, and did not clearly specify to consumers that Mutual of Omaha had control over one of them.
Dispute and ruling
Over the past several months, Longbridge and Mutual of Omaha have been filing information with the court, making and/or responding to various claims by the other party.
But it wasn’t until this week that Sabraw weighed in to assess Longbridge’s request for a preliminary injunction. It seeks to take down material it considers deceptive and misleading from websites that it claims unfairly steer reverse mortgage business toward Mutual.
While some particulars of Longbridge’s argument were rejected by the judge, he ultimately decided to restrict future statements which may imply that Longbridge is not licensed to offer reverse mortgages in states that it is.
Sabraw also ruled that Mutual may not “simultaneously advertise to consumers on sponsored Google-search links that they provide information relating to ‘Top 3’ reverse mortgage providers” without listing three independent lenders.
One of the contentions made by Longbridge in the suit is that Mutual of Omaha was presenting Retirement Funding Solutions (RFS) as a separate entity in its rankings of “top” reverse mortgage lenders on the two websites at issue — Review Counsel and Advisory Institute. RFS was the brand that the reverse mortgage arm of Mutual of Omaha previously operated under.
In 2019, this division transitioned primarily to the Mutual of Omaha name, but an RFS website is maintained by the company, the original court complaint said.
“Review Counsel and Advisory’s prior Google ads promising information about ‘Top 3’ reverse mortgage providers are problematic because those ads redirected consumers to landing pages that highlighted Mutual of Omaha and RFS — which the parties agree are the same company — as two of the three ‘top’ providers,” Sabraw wrote.
“Thus, the law and facts clearly favor Longbridge’s claim that these statements were literally false on their face.”
The judge added that Longbridge “has established that the law and facts clearly favor its claim that Review Counsel and Advisory’s spotlighting and recommending of Mutual of Omaha and RFS as two separate reverse mortgage providers was literally false by necessary implication.”
The judge ruled that Longbridge has sufficiently “carried its burden to show that the other past statements, while not literally false, would likely mislead or confuse consumers.” He added that previous disclosures on Review Counsel’s website describing it as “affiliated” with Mutual of Omaha “obfuscated Mutual of Omaha’s actual control and ownership of Review Counsel.”
Disclosures and relationships
Advisory Institute is not owned by Mutual, but it was founded in January 2024 by “a former general counsel of Mutual of Omaha, and is wholly owned by him,” meaning that the lender “is Advisory’s only advertising partner,” according to the judge.
Its disclosures specified that it receives advertising compensation “from certain partners” which “may influence the presence and positioning of companies” on the website.
But “at no point did Advisory disclose that Mutual of Omaha paid it to advertise on Advisory’s website,” the judge said. Advisory clarified its relationship to Mutual in updates made to its website in January.
“Advisory’s long-form disclosure page ultimately provides” information about such a relationship, the judge said. But Longbridge sufficiently demonstrated that Advisory’s September 2024 disclosures “were misleading and confusing to consumers,” particularly since the lender is the only advertising partner with which the site engages in business.
Longbridge also argued in its filings that the presence of the “.org” extension on the sites’ web addresses could give the impression that the sites are nonprofit entities. The judge rejected that argument.
Mutual of Omaha and the other defendants’ “current disclosures likely counteract” such an argument, the judge said. “Accordingly, the Court declines to require Defendants to remove their webpages on this ground.”
But the order restricts the defendants from “advertis[ing] RFS on their websites as if RFS were an independent reverse mortgage provider originating its own loans.”
It also calls for Review Counsel to maintain what is currently a prominent banner on its homepage stating it is “owned and operated by Mutual of Omaha Mortgage.” Lastly, Advisory may “not diminish” the clarity or visibility of disclosures as they appeared in January.
Company responses
HousingWire’s Reverse Mortgage Daily (RMD) reached out multiple times to representatives of Mutual of Omaha prior to the publication of this story, but received neither a reply nor an acknowledgement of its requests for comment.
Trevor Chapman, a spokesperson for Longbridge, provided RMD with a statement.
“We are pleased the court recognized the merits of our claims and has taken steps to address the misleading conduct we identified,” Chapman said.
“While we believe most participants operate with integrity, this preliminary injunction is a positive step toward protecting consumers from deceptive marketing practices and helping to ensure fair competition in the reverse mortgage marketplace. We’re confident the facts will continue to support our case as this process moves forward.”
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