A group of Florida homeowners has filed a federal class-action lawsuit against D.R. Horton, the nation’s largest homebuilder, and its mortgage affiliate, DHI Mortgage Co., accusing them of deceptive lending tactics that left buyers paying hundreds more per month than promised.
Filed in the U.S. District Court for the Middle District of Florida, the lawsuit claims the companies worked together to advertise “affordable” monthly payments that excluded full property tax costs — a practice attorneys describe as a “Monthly Payment Suppression Scheme.”
Once the homes were sold and the mortgages transferred, many buyers said their monthly payments unexpectedly soared.
Attorneys from Varnell & Warwick, P.A., Clarkson Law Firm, P.C., and the National Consumer Law Center (NCLC) are representing the plaintiffs. They’re seeking financial compensation and reforms to D.R. Horton’s sales practices under the Racketeer Influenced and Corrupt Organizations Act (RICO), which could allow buyers to recover up to three times their losses.
“The lawsuit alleges that D.R. Horton and DHI Mortgage were running a scheme to mislead first-time homebuyers into thinking their total monthly housing costs would fit their budgets,” said Jennifer Wagner, senior attorney at the NCLC. “They preyed on people’s faith in the American Dream of homeownership to lure them into unaffordable, deceptive deals.”
One plaintiff, Frankie Santiago of Lake County, said he was told his monthly payment would be $2,164. Less than a year later, after his loan was sold, his new mortgage servicer recalculated his escrow to include full property taxes and past due amounts, raising his payment nearly $1,000 to $3,136 per month.
Mortgage expert Jason Kindler, president of First Coast Mortgage Funding, said the issue likely stems from how property taxes are estimated on new construction homes — but if done intentionally, it’s a serious violation.
“What I believe was happening is they were being disclosed unimproved taxes,” Kindler explained. “On a new construction home, the county hasn’t assessed the full property value yet, just the land. So if the land taxes are $600 a year but the full taxes will be $4,000, that’s a big difference. If someone intentionally left that out to make payments look lower, that’s a major problem.”
Kindler added that for buyers already stretched thin, these sudden increases can lead to devastating consequences. “If you go in thinking you’re paying $2,000 a month and suddenly it’s $3,000, that person may not be able to afford that. For some, it could mean foreclosure.”
Having worked in new construction lending for over a decade, Kindler said he’s seen similar issues — sometimes due to inexperience, sometimes deliberate. “There are cases where loan officers might say whatever it takes to get the person in the home. Then a year later, the builder’s out of the picture, the loan’s been sold, and the homeowner’s left holding the bag.”
He recommends buyers ask detailed questions about how property taxes are estimated and ensure their loan disclosures reflect “improved” property values, not just land assessments. “At my company, we use an estimated tax calculator for every county,” he said. “It’s not perfect, but it gives people a much better idea of what their payments will really be once the home is assessed.”
Attorneys say the case is about more than recovering money — it’s about stopping what they call a pattern of predatory behavior in homebuilding and lending.
“Our goal in bringing this class-action lawsuit is to recover damages for the many people around the country who’ve been cheated and to prevent future homeowners from being lured into this predatory scheme,” said Kristen Simplicio, a partner at Clarkson Law Firm.
D.R. Horton has not yet responded to the allegations.
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