Fannie Mae is suing several home warranty providers, claiming the companies willfully misused the government-sponsored mortgage buyer’s service mark in solicitations and marketing materials to create a “false impression of affiliation, sponsorship or endorsement by Fannie Mae.”
The complaint filed in an Ohio-based U.S. district court alleges that beginning in or around July 2023, the home warranty companies used “FANNIE MAE MORTGAGE” branding without permission or authorization. Fannie claims the warranty firms’ materials were “designed to create a false sense of urgency and compel immediate consumer action.”
“Defendants’ unauthorized use of Fannie Mae’s mark was deliberate and intended to trade on Fannie Mae’s goodwill and reputation to induce consumers to purchase warranty products under false pretenses,” the complaint states.
The defendants named in the lawsuit are Warranty Global Group Inc. and US Home Guard LLC, both based in Texas, plus Missouri-based Superior Home Protection LLC and Florida-based Oasis Home Protection LLC.
The complaint claims that Warranty Global served as the “architect of the fraudulent marketing campaign” by allegedly commissioning the other companies to carry out the consumer solicitations containing the Fannie Mae mark.
Officially known as the Federal National Mortgage Association, Fannie purchases mortgages from banks and other lenders, thereby injecting liquidity into the secondary mortgage market. Established by Congress in 1938, the company registered Fannie Mae as a service mark in 1972.
Fannie does not originate mortgages, nor does it require warranty policies on the homes secured by the mortgages it purchases. The complaint claims that the government-sponsored enterprise has “received multiple inquiries from confused consumers who believed the solicitations came from Fannie Mae or were endorsed by Fannie Mae.”
Attorneys for Fannie have filed a motion for a temporary restraining order against the defendants, and they are also seeking permanent injunctive relief and the awarding of punitive damages via a jury trial.
The court docket indicates a hearing is scheduled for Wednesday regarding the restraining order motion, which will provide an opportunity for the defendants to respond to the complaint.
