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”
I have had several buyers prefer to use Rocket and Quicken over local lenders. And from What I could tell they were happy with the service they obtained and fees, rates and terms.
The article mentions they are looking for others to join their Lawsuit. It sounds like a cash grab a money grab to me and this is what this firm does.
Key details regarding Hagens Berman’s actions against big banks:
Antitrust Litigation: The firm has targeted Bank of America, JPMorgan Chase, and Wells Fargo over inflated ATM fees, reaching a $66.7 million settlement.
Whistleblower Cases: Hagens Berman has represented whistleblowers against Bank of America regarding mortgage fraud and failure to provide benefits under the Home Affordable Mortgage Program (HAMP).
Securities Litigation: They have represented investors in actions against major banks, including Bank of America and Charles Schwab.
Financial Instrument Settlements: The firm has secured settlements with major institutions such as Barclays, Bank of America, Citi, HSBC, and JPMorgan regarding over-the-counter financial instruments.
What about people who refinanced through Rocket Mortgage in the timeframe?
If this law firm reached settlements with all these banks it is probably because these firms were breaking the law, or not providing the services they advertised, and took advantage of their clients/customers. That is they job!