Prosperity Home Mortgage has been the subject of two significant class action lawsuits, both alleging that the company operated as a sham entity designed to funnel illegal kickbacks between Wells Fargo and Long & Foster Real Estate. Both cases ended in wins for the defendants in federal court. A separate class action filed in 2023 under the Telephone Consumer Protection Act is also on the record. If you are researching a Prosperity Home Mortgage lawsuit, the short answer is that the company has been sued but has not been found liable in the major consumer cases against it.
The RESPA Kickback Case: Minter v. Wells Fargo
In 2007, borrowers Denise Minter, Jason and Rachel Alborough, and Lizbeth Binks filed suit in the U.S. District Court for the District of Maryland against Wells Fargo, Long & Foster Real Estate, Prosperity Mortgage Company, Walker Jackson Mortgage Corporation, and Wells Fargo Ventures.1United States Courts. Minter v. Wells Fargo Bank, Fourth Circuit Opinion The case was captioned Minter v. Wells Fargo Bank, N.A., Case No. 1:07-cv-03442.
The plaintiffs represented a class of consumers who bought homes through Long & Foster realtors and took out mortgages through Prosperity in 2006 and 2007. They brought three claims under Section 8 of the Real Estate Settlement Procedures Act:
- Section 8(a): Wells Fargo paid kickbacks to Long & Foster in exchange for mortgage referrals.
- Section 8(c): Prosperity was not a genuine settlement service provider but a front used to route Long & Foster customers to Wells Fargo.
- Section 8(c)(4): The defendants failed to give borrowers required disclosures about the affiliated business arrangement.
The core allegation was that Prosperity performed “little to no real work” on mortgage transactions and that Wells Fargo was the actual lender operating behind the scenes.1United States Courts. Minter v. Wells Fargo Bank, Fourth Circuit Opinion
The Section 8(c) and 8(c)(4) claims went to trial. On June 7, 2013, a jury returned a unanimous verdict for the defendants, finding that plaintiffs had not proved Prosperity was a sham and had not proved that Long & Foster unlawfully referred or pressured borrowers into using the company.2Long & Foster Newsroom. Long & Foster, Prosperity Mortgage Company Prevail in Minter Lawsuit The district court entered judgment for the defendants on all RESPA claims, and the Fourth Circuit Court of Appeals affirmed on August 5, 2014.1United States Courts. Minter v. Wells Fargo Bank, Fourth Circuit Opinion
The Maryland Finder’s Fee Case: Petry v. Prosperity Mortgage
A second class action, Petry v. Prosperity Mortgage Company LLC, attacked the company from a different angle. Bradley and Stacey Petry alleged that although Prosperity presented itself as a lender, it actually functioned as a mortgage broker helping borrowers obtain loans from Wells Fargo. Under Maryland’s Finder’s Fee Act, a mortgage broker cannot charge fees in a transaction where it is also the lender.3Findlaw. Petry v. Prosperity Mortgage Company LLC
The Petrys claimed every fee Prosperity charged at closing (application, processing, and underwriting fees) amounted to an illegal finder’s fee. They sought refunds and statutory damages of three times the fees collected, and they attempted to hold Long & Foster and Wells Fargo liable as aiders and conspirators.3Findlaw. Petry v. Prosperity Mortgage Company LLC
The district court certified a class of Maryland borrowers whose loans identified Prosperity as the lender and were funded through Wells Fargo’s line of credit. The case never reached a jury. When the court required the plaintiffs to show that Prosperity’s fees were “excessive or redundant,” they conceded they had no evidence to make that showing. The court entered judgment as a matter of law for the defendants on June 20, 2013.3Findlaw. Petry v. Prosperity Mortgage Company LLC
The Fourth Circuit affirmed on July 10, 2014. Because Prosperity was named as the lender on every closing document, including the promissory note, the deed of trust, and the HUD-1 settlement statement, the court held it was “categorically excluded” from the statutory definition of a mortgage broker under Maryland law. With no broker, the Finder’s Fee Act did not apply.4Findlaw. Petry v. Prosperity Mortgage, Fourth Circuit Summary
Why the Sham Joint Venture Claims Failed
Both cases turned on the same underlying question: was the Prosperity joint venture a real business or a paper entity used to disguise referral payments? Prosperity was formed in 1993 as a 50/50 joint venture between Norwest Mortgage (later Wells Fargo) and Walker Jackson Mortgage Corporation, a subsidiary of Long & Foster. Each partner appointed half of the operating committee, and Prosperity originated loans using a wholesale line of credit provided by Wells Fargo.1United States Courts. Minter v. Wells Fargo Bank, Fourth Circuit Opinion
This kind of structure is called an “affiliated business arrangement” under RESPA. Real estate companies are allowed to own mortgage lenders and refer customers to them, but only when the affiliated entity actually performs substantial settlement work, borrowers receive written disclosure of the relationship, borrowers are not required to use the affiliate, and any payments between the entities represent genuine returns on ownership rather than disguised referral fees. Payments that rise and fall with referral volume are a red flag for regulators.5Consumer Financial Protection Bureau. Regulation X, Section 1024.15 – Affiliated Business Arrangements
In Minter, the jury weighed those factors and concluded that Prosperity did enough real work to be a legitimate operation. In Petry, the Fourth Circuit resolved the case on the narrower ground that the documents identified Prosperity as the lender, which took it outside the statute the plaintiffs were suing under. Neither ruling declared the joint-venture model beyond challenge, but both left Prosperity’s structure intact.
What Happened to Prosperity After the Lawsuits
Ownership of the company changed while the litigation was ending. In July 2013, Wells Fargo announced that Wells Fargo Ventures would withdraw from eight mortgage joint ventures, including Prosperity, citing “increasing complexity and difficulty” from changes in state and federal oversight.6Inman. HomeServices Taking Sole Ownership of Joint Venture With Wells Fargo Long & Foster terminated the venture with Wells Fargo’s consent and formed a new mortgage lender as a wholly owned subsidiary, effective January 1, 2014.7The Title Report. Long & Foster to Terminate Prosperity Mortgage Joint Venture
In September 2017, HomeServices of America, an affiliate of Berkshire Hathaway, acquired The Long & Foster Companies, including Prosperity Home Mortgage.8HomeServices of America Blog. HomeServices of America Acquires The Long & Foster Companies Financial terms were not disclosed.9NPR. Long & Foster Sold to Warren Buffett’s HomeServices of America
Prosperity Home Mortgage, LLC is now headquartered in Chantilly, Virginia and licensed in 49 jurisdictions. It is a subsidiary of HomeServices of America, which is owned by Berkshire Hathaway Energy, a consolidated subsidiary of Berkshire Hathaway Inc.10National Mortgage Professional. Prosperity Home Mortgage Names New President and CEO Justin Messer has served as president and CEO since January 1, 2023.11Prosperity Home Mortgage. Prosperity Home Mortgage Names Justin Messer President and CEO The company continues to act as the mortgage affiliate for real estate brokerages inside the HomeServices network, including Berkshire Hathaway HomeServices Fox & Roach.12Prosperity Home Mortgage. Berkshire Hathaway HomeServices Fox and Roach Selects Prosperity Home Mortgage as Their Mortgage Affiliate
Other Lawsuits in the Corporate Family
A more recent class action against Prosperity itself, Keller v. Prosperity Home Mortgage LLC, Case No. 6:23-cv-05048, was filed in the U.S. District Court for the District of South Carolina in 2023 under the Telephone Consumer Protection Act. Details about the allegations and current status are limited in the available record.13Law360. Keller v. Prosperity Home Mortgage LLC
A separate matter often surfaces in searches about Prosperity but involves a different company. Trident Mortgage Company, a sibling entity inside the Berkshire Hathaway corporate structure through Fox & Roach LP and HomeServices of America, settled a redlining case with the CFPB and the U.S. Department of Justice in 2022. The agencies alleged that between 2015 and 2019, Trident intentionally avoided serving majority-Black and Hispanic neighborhoods in the Philadelphia-Camden-Wilmington area. According to the complaint, 51 of Trident’s 53 offices in that area sat in majority-white neighborhoods, and employees circulated emails containing racial slurs.14Wolters Kluwer. Trident Mortgage Settles CFPB, DOJ Redlining Charges The consent order required Trident to invest over $20 million, including $18.4 million in loan subsidies for qualified applicants in majority-minority neighborhoods and a $4 million civil penalty. The court terminated the consent order early in June 2025 after finding Trident substantially in compliance.15Redline Civil Rights. Consumer Financial Protection Bureau and United States v. Trident Mortgage Company Prosperity Home Mortgage was not a defendant in that action.