The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Rocket Homes, an affiliate of Rocket Companies Inc. (NYSE: RKT), that accuses the company of providing incentives to real estate brokers and agents in exchange for steering homebuyers to Rocket Mortgage LLC for loans.
The lawsuit also takes aim at Jason Mitchell, his real estate brokerage firm JMG Holding Partners LLC (which does business as The Jason Mitchell Group), and the individual real estate brokerage companies in the 41 states and the District of Columbia where it does business.
According to the CFPB, Rocket Homes violated the Real Estate Settlement Procedures Act by pressuring real estate brokers and agents not to share information with their clients concerning products that were not offered by Rocket Mortgage, including the availability of down payment assistance programs. The CFPB claimed Rocket Homes gave referrals and other incentives to real estate brokerages under an agreement or understanding that the real estate brokers and agents would refer real estate settlement business to Rocket Mortgage and a separate Rocket affiliate called Amrock, which handles title, closing, and escrow services.
The CFPB’s also accused The Jason Mitchell Group of referring thousands of clients to Rocket Mortgage and Amrock, with Jason Mitchell offering “Dog Bone” awards of $250 gift cards to Jason Mitchell Group agents who made the most referrals to The Mitchell Group’s favored partners, including Rocket Mortgage and Amrock.
The CFPB said it is seeking to obtain a civil penalty against the accused parties, which would be deposited into the CFPB’s victims’ relief fund.
“Rocket engaged in a kickback scheme that discouraged homebuyers from comparison shopping and getting the best deal,” said CFPB Director Rohit Chopra. “At a time when homeownership feels out of reach for so many, companies should not illegally block competition in ways that drive up the cost of housing.”
In a statement, Rocket Homes vigorously pushed back at the CFPB’s allegations.
“The accusation that homebuyers paid more when working with Rocket Homes is a lie,” the company said. “Additionally, the notion that Rocket Homes penalized real-estate brokers or agents for helping clients compare rates and choose the best lender for them is also a lie.”
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