• Key Insight: Top lawmakers want the Trump administration to probe the practices of dominant real estate industry players. 
• Supporting Data: The Federal Trade Commission previously sued Redfin and Zillow over their deal to stop Redfin's rental listings. 
• Expert Quote: "Platform-affiliated agents are frequently required to route buyers to platform-affiliated mortgage lenders who charge higher rates and impose worse loan terms," — Sens. Booker and WarrenOverview bullets generated by AI with editorial review.  

Mortgage lenders with co-marketing or referral ties to real estate platforms like Zillow may want to review their RESPA exposure, after two Democratic senators asked the Federal Trade Commission to probe platforms that steer homebuyers to affiliated lenders and don't disclose referral fees.  Sens. Cory Booker, D-New Jersey, and Elizabeth Warren, D-Massachusetts, asked the Federal Trade Commission last week to probe "anticompetitive and deceptive" practices they say are exacerbating the housing affordability crisis. Their letter targets "dominant real estate actors," but heavily alludes to Zillow and its oft-scrutinized conduct. 

"Platform-affiliated agents are frequently required to route buyers to platform-affiliated

mortgage lenders who charge higher rates and impose worse loan terms," the letter read. "... Neither the platform nor affiliated agents disclose these mortgage referral fees to buyers."

Booker and Warren, ranking members on separate Senate subcommittees, addressed FTC Chairman Andrew Ferguson. The Trump appointee oversaw the FTC's lawsuit last year against Redfin and Zillow, over the latter's $100 million payment for the former to shutter its apartment listings. The sides reached a deal in August, requiring Redfin to re-list apartment listings and make investments to compete in the listing space. 

The Trump administration has pledged to reduce home buying costs, although home prices remain elevated and once-sub 6% rates are well into the 7% range. Regulators have not targeted industry giants, but consumer lawsuits over alleged steering practices have risen.

Neither the FTC nor a spokesperson for Zillow, which was mentioned throughout the letter, responded to requests for comment Monday. 

What practices are under fire?

Beyond steering, Dems are asking the FTC to investigate two other rampant practices. One is undisclosed commission-sharing arrangements, in which platform-affiliated agents don't disclose their remittance of a share of their commission back to the platform, to buyers. 

The other is the "anticompetitive" use of private listings, in which major brokerages market homes to select groups of buyers before the public, restricting available housing stock to the detriment of buyers and competing firms. The letter references Compass' lawsuit with Zillow over private listings, in a larger dispute which invokes National Association of Realtors policy. 

The lawmakers underscored the need to investigate by citing data describing affordability constraints, such as the national median home price reaching an all-time high of around $440,600 this summer, according to NAR. The letter also mentioned stagnant wage growth and inflation, which continues to pester consumers.

In chiding captive lending arrangements, the senators also pointed to studies explaining the cost savings for consumers shopping for a mortgage. Reports have repeatedly found that the majority of prospective borrowers don't shop for rates between lenders.