Optimal Blue and dozens of lenders are poking holes in an antitrust case from borrowers, suggesting a core flaw in their claims in that the vendor doesn't operate a pricing algorithm. 

Defendants including 26 of the industry's most prominent originators hinted at their arguments Monday in their first formal response to the lawsuit filed last October. Four borrowers sued the group of companies for allegedly conspiring with their peers and Optimal Blue to share sensitive pricing information and inflate rate spreads.

The prospective class action suit could span millions of affected consumers and untold damages, although plaintiffs haven't expanded on their accusations. After months of arranging counsel, the sides filed a proposed initial case management plan in a Tennessee federal court, which included brief legal theories. 

The plaintiffs point to Optimal Blue's Competitive Analytics and Competitive Data License tools, arguing the vendor allows competitors to weigh real-time loan home pricing against competitors and therefore conspire to raise fees across the board. The 29 defendants raise core issues with the complaint, including that some of the lenders named never used Optimal Blue products. 

The vendor's business tools don't dictate or recommend prices to users, attorneys for all defendants wrote Monday. Each user rather decides for itself how it will use the widespread mortgage rate and fee data. 

"Instead, Competitive Analytics and Competitive Data License provide backward-looking, aggregated, anonymized, and de-identified data to certain mortgage loan originators and other users, including the U.S. Federal Reserve," the filing read. 

The companies denied any agreement to fix prices, or engage in anticompetitive information sharing. 

None of the lenders listed have commented publicly on the case. A spokesperson for Optimal Blue declined to comment on the latest filing, but reshared CEO Joe Tyrrell's statement on the case in October, in which he reiterated the company doesn't provide pricing or rate recommendations. 

"Plaintiffs' allegations indicate a clear lack of understanding of the Optimal Blue products and the industry in which they are used; they are not just false, they are absurd to anyone that operates in this industry," said Tyrrell. 

Attorneys for plaintiffs also didn't reply to requests for comment Wednesday.

How the case may unfold

The lawsuit challenged the supposed mortgage cartel faces a long runway, with Monday's filing describing various litigation deadlines up to a 2029 trial. The companies said they've asked plaintiffs to remove the non-Optimal Blue users in an amended complaint, and defendants plan to file a motion to dismiss by April. 

The sides will also attempt a settlement discussion before early May. The mortgage players in the filing also suggested discovery negotiations will cost them at least tens of thousands of dollars, therefore necessitating the need to remove non-Optimal Blue defendants quickly. 

The complaint is unlike any other active litigation in the mortgage industry, although other leading lenders have fended off similarly serious accusations in recent years. Both United Wholesale Mortgage and CrossCountry Mortgage kept racketeering claims at bay in recent years, while homebuilder giant D.R. Horton is fighting similar civil counts against itself and DHI Mortgage arm.