Legal News

Will Google Service Your Next Mortgage? Possibly, Says Lawsuit

By Ashby Jones

As far as lawsuits go, it’s not all that legally earthshattering: a six-page complaint between two companies with one alleged cause of action: breach of contract. But the factual allegation is, to the contrary, pretty intriguing: that Google is about to get into the loan-servicing business. Click here for the AP story; here for the complaint, filed in federal court in Charlotte, NC; here for an earlier post from the WSJ’s Digits blog.

Here’s the backstory: LendingTree, a company owned by Tree.com, makes its living off of allowing prospective borrowers to get quick offers from multiple lenders. The lawsuit, filed this week by LendingTree, wasn’t against Google, but a third-party technology provider, called Mortech Inc., which helps automate pricing by lenders who are offering loans.

The lawsuit says Mortech reached an agreement with LendingTree in which it would limit its ability to make pricing searches available to other online loan aggregators. LendingTree claims Mortech has broken that agreement by giving data related to mortgage offers to Google in connection with Google’s testing.

LendingTree, which allows prospective borrowers to get quick offers from multiple lenders, claims Google is about to get into the same business. LendingTree alleges that Google plans to launch such a service later this month or in early September.

Google issued a written statement Wednesday saying it is “working on a small ad unit test” involving a limited number of mortgage-related searches. “We have a number of experiments going on at any one time, but we don’t speculate on future product development,” the company said.

A Mortech spokeswoman as well as Google declined to comment on the lawsuit. A court hearing is planned for Sept. 2.

Full post as published by Law Blog - WSJ.com on August 27, 2009 (boomark / email).