The law firm of Hagens Berman has announced a consumer class action lawsuit against Rocket Companies (NYSE: RKT) that accuses the Detroit-based financial giant of forcing its agents to steer clients into using Rocket Mortgage.
The lawsuit, which was filed Jan. 26 in the US District Court for the Eastern District of Michigan, accuses Rocket Companies and three of its divisions – Rocket Mortgage, Rocket Homes, and Amrock Holdings – of having “exploited the vulnerability of home buyers for profit,” by steering consumers to use their financing “even though Rocket Mortgage’s terms are disadvantageous to the clients.”
“Based on this investigation, consumers were directly harmed by the steering practice because Rocket Mortgage, and its predecessor, Quicken Loans, offered substandard loan packages that charged higher interest rates and offered fewer cost-saving opportunities for home buyers,” the lawsuit stated. “As a result of these substandard loans, ‘Rocket Mortgage charged higher rates and fees to consumers who went through the Rocket Homes network compared with consumers who didn’t go through the network’ – a clear sign of illegal steering.”
The law firm is seeking out consumers who bought a home since Jan. 1, 2019, and used Rocket Mortgage or Quicken Loans for to join the lawsuit.
“Everyday families rely on the laws governing our nation’s real estate market for fairness and transparency, and we believe Rocket has failed to play by the rules,” said Steve W. Berman, managing partner and co-founder of Hagens Berman. “We believe at least hundreds of thousands of consumers have been duped by Rocket’s tricks, and judging by its year-over-year revenue, its scheme has worked. Buying a home is most likely the largest purchase any individual will make in their lifetime, and housing is a basic need. That Rocket sought to capitalize on this by pressuring homebuyers into bad loans is not only illegal, but immoral.”
A Rocket spokesperson sent a statement to Weekly Real Estate News that said, “We categorically disagree and will dispute the allegations that Rocket, Redfin or any of the named defendants are doing anything illegal. The claims in this case are a complete retread of the case that the CFPB filed and was quickly dismissed. Rocket is proud to help homebuyers navigate complex real estate partnerships. We are confident that we will be vindicated once facts are presented”
