CFPB Sues Rocket Home Real Estate and a Group of Real Estate Brokerage Affiliates
In its Complaint ( CFPB – Rocket Homes RESPA Complaint ) filed against Rocket Home Real Estate LLC, its affiliate company Rocket Mortgage, a group of real estate brokerage affiliates, the CFPB alleges the defendants violated various provisions of the Real Estate Settlement Procedures Act (“RESPA”) and its implementing regulation, Reg. X. Specifically, Rocket Homes is alleged to require real estate agents and brokers who receive referrals from Rocket Homes to steer consumers to Rocket Homes’ affiliate, Rocket Mortgage. The agents and brokers allegedly must refrain from mentioning any comparison shopping for mortgages or discussing programs or options not offered by Rocket Mortgage.
The brokerage group are alleged to have been running a kickback scheme, whereby the real estate agents would make referrals to Rocket Mortgage in return for priority referrals from Rocket Homes.
RESPA was enacted to help prevent the exploitation of consumers’ reliance on their real estate agent or broker and specifically prohibits brokers or agents from receiving “things of value” in return for referrals. In the Complaint, which is attached, the CFPB alleges that the Group’s brokers made thousands of referrals to a list of preferred partners, including Rocket Mortgage and, in return, was given priority referral flow from Rocket Homes. The CFPB requests injunctive relief, restitution, damages, redress paid to consumers, and disgorgement of ill-gotten revenues.
Legal Alert by : Barron & Newburger,P.C.
Rocket Homes gave kickbacks to realtors for homeowner loans, CFPB alleges
Lawsuit alleges realtors got $250 gift cards
Lender Rocket Homes gave kickbacks to real estate brokers and agents to get homebuyers to sign up for its loans, the Consumer Financial Protection Bureau alleged in a lawsuit on Monday.
The lawsuit aims to stop the alleged kickback scheme, which gave referrals and other incentives to pressure “real estate brokers and agents not to share valuable information with their clients concerning products not offered by Rocket Mortgage, such as the availability of down payment assistance programs, which often save homebuyers thousands of dollars,” the CFPB said.
“Rocket engaged in a kickback scheme that discouraged homebuyers from comparison shopping and getting the best deal,” CFPB Director Rohit Chopra said. “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.”
Additionally, the CFPB sued The Jason Mitchell Group, a real estate firm doing business in 41 states and the District of Columbia, for participating in the kickback scheme and referring thousands of homebuyers to Rocket Homes and an affiliate.
For example, the CFPB said The Jason Mitchell Group gave $250 gift cards to agents that made the most referrals to its favored partners: Rocket Mortgage and Amrock, a Rocket Homes-affiliate that handles title, closing and escrow services.
A spokesperson for Rocket Homes told Consumer Affairs that the “allegations are false and a distortion of reality.”
“The facts are clear – data shows one third of consumers with a loan application already in progress with Rocket Mortgage, before contacting Rocket Homes, chose to close with a different lender,” the spokesperson said. “This proves Rocket Homes is committed to empowering homebuyers to make the best decisions for their unique needs. Rocket Homes has always focused on connecting buyers with top-performing agents based on measurable success metrics.”
The Jason Mitchell Group didn’t immediately respond to ConsumerAffairs’s request for comment.
Dieter Holger is a data reporter for ConsumerAffairs. His work has appeared in The Wall Street Journal, MarketWatch, PCWorld and dozens of other outlets. He holds a Master of Science in computational and data journalism from Cardiff University and a Bachelor of Arts in philosophy from UC Santa Cruz. Write to him at dholger@consumeraffairs.com.