Borrowers are doubling down on racketeering accusations against D.R. Horton and its DHI Mortgage financing arm.
Seven plaintiffs filed a class action lawsuit in Nevada federal court Wednesday, following a
"No other mortgage lender in the United States engages in the practice of partially escrowing property taxes by deliberately including only a small portion of a homebuyer's property taxes in their monthly payment," wrote attorneys for plaintiffs, alluding to the scheme.
In a 93-page filing, plaintiffs recount earlier allegations in suggesting D.R. Horton and DHI knew they were misleading borrowers with lower upfront monthly mortgage payments. The Nevada homebuyers in the latest complaint say their monthly payments rose as much as over $1,000, once a new servicer performed a new escrow analysis with the
Federal Housing Administration borrowers were also targeted, the complaint claims. In all, the lawsuit posits the nationwide class could span upward of 100,000 affected DHI Mortgage borrowers.
"These companies have preyed on a huge number of Nevada residents, which makes Nevada an obvious choice for where to challenge their conduct on a broader basis," wrote Jennifer Wagner, a senior attorney with the National Consumer Law Center, in an email Thursday on behalf of plaintiffs.
A spokesperson for D.R. Horton and DHI Mortgage said the companies strongly disagree with the claims and intend to vigorously defend against them.
How D.R. Horton, DHI allegedly preyed on borrowers
The case also accuses the companies of negligence, unjust enrichment and violating the Nevada Deceptive Trade Practices Act, for concealing the property taxes in question.
According to the lawsuit, DHI Mortgage creates for DR Horton buyers a "suppressed" escrow estimate based on the lower property tax assessment for the unimproved land, before the home is built. A true escrow estimate is contained in some misleading loan documents, but the companies quote borrowers a lower monthly payment based on the suppressed escrow.
The true escrow estimate is also included in Department of Housing and Urban Development forms required for FHA transactions, although those borrowers also still receive artificially lower monthly mortgage payment estimates. Months after the purchase, a new servicer performs an escrow analysis and requires the homeowner to pay both a new, higher monthly payment and backpay for the true property taxes.
Through the bait-and-switch scheme, D.R. Horton makes its homes appear more affordable than competitors, and qualifies homebuyers for homes that cost more than they understand they can afford, plaintiffs said.
The lead plaintiffs each describe home purchases in 2023, in which their monthly mortgage payments grew hundreds of dollars months after their purchase. Similar to the Florida case, one family claims their monthly payment rose from $2,878 per month to $3,968 per month when a new servicer performed an escrow analysis.
Who was impacted?
In addition to seeking certification for a class of DHI Mortgage borrowers who bought DR Horton homes with suppressed estimated property tax estimates, borrowers want to also certify subclasses of Nevada and FHA borrowers.
The lawsuit suggests tens of thousands of likely class members nationwide, but references the leading homebuilder's wider scope. According to the company's fiscal year 2025 earnings report in October, DHI closed on over 89,000 homes, including 46% with FHA loans.
Plaintiffs emphasized D.R. Horton's vague language regarding the property tax disclosures, and the difficult position the company allegedly put its customers in at closing.
"Defendants know that any such last minute 'disclosure' regarding property taxes will not cause anyone to walk away," wrote attorneys.
D.R. Horton made headlines in October for a
