A new class action claims D.R. Horton and DHI Mortgage misled FHA buyers by understating monthly costs—raising big questions for mortgage professionals
A newly filed class action in Florida federal court accuses D.R. Horton and DHI Mortgage of masking true mortgage costs for FHA homebuyers across the country.
A sweeping class action complaint, lodged October 1, 2025, in the United States District Court for the Middle District of Florida, Orlando Division, names D.R. Horton, Inc.—the nation’s largest homebuilder—and its mortgage subsidiary, DHI Mortgage Company, Ltd., as defendants. The suit, brought by Frankie Santiago, Nicole Neronha, Joseph Neronha, Maria Neronha, and Onny Jules on behalf of themselves and all others similarly situated, alleges the companies systematically understated property tax estimates in monthly mortgage payment disclosures to FHA homebuyers.
At the heart of the complaint is what plaintiffs call the “Monthly Payment Suppression Scheme.” According to the filing, D.R. Horton and DHI Mortgage allegedly attracted first-time and working-class buyers by promising low monthly payments, while knowing the true property tax obligations were higher than what was quoted. The plaintiffs allege the companies included only a fraction of the actual property taxes in their calculations, making homes appear more affordable and enabling buyers to qualify for loans that were more expensive than they realized they could afford.
The complaint describes a coordinated process: D.R. Horton, through its sales agents, would focus buyers’ attention on monthly affordability, often asking what they could pay and tailoring offers to fit that number. DHI Mortgage would then prepare loan estimates and closing disclosures using the suppressed tax figures—based on the unimproved land value, not the finished home. The complaint alleges that the true, higher property tax estimates were known internally but not disclosed to buyers in the monthly payment calculations.
The impact, according to the complaint, was significant. Buyers would discover the actual costs only after closing, when their loans were transferred to new servicers who conducted escrow analyses using the correct property tax amounts. For plaintiff Frankie Santiago, the monthly payment increased from $2,164.68 to $3,136.33 in less than a year. The Neronha family saw their payment rise from $2,602.47 to $3,439.07. The complaint states that these increases left families struggling to cover the difference and, in some cases, at risk of foreclosure.
The suit asserts that these practices violated federal regulations, including FHA requirements codified at 24 C.F.R. Part 203, the Real Estate Settlement Procedures Act (RESPA), and the Truth in Lending Act (TILA), all of which require lenders to use accurate estimates for escrow and monthly payment calculations. The complaint states that DHI Mortgage, as an FHA lender, was familiar with these requirements but did not comply.
The proposed class includes all individuals in the United States who, during the class period, purchased a D.R. Horton home with an FHA-insured loan originated by DHI Mortgage, where the property taxes set forth on the HUD Conditional Commitment Direct Endorsement Statement of Appraised Value form were higher than the amount of taxes included in the initial escrow analysis as reflected on the final Closing Disclosure. The complaint estimates the class may include tens of thousands of homebuyers nationwide, with the amount in controversy exceeding $5,000,000.
The plaintiffs seek damages, disgorgement of profits, and injunctive relief to require the defendants to comply with the law and cease the alleged practices.
As this is a newly filed complaint, the allegations are claims made by the plaintiffs. D.R. Horton and DHI Mortgage have not yet responded in court. The case is significant for mortgage professionals and industry stakeholders, as it raises questions about compliance with federal disclosure and escrow requirements, the risks of integrated builder-lender business models, and the potential for large-scale class action liability in the mortgage sector.
