CFPB Initiates Legal Action to Halt Unlawful Kickback Scheme Aimed at Directing Borrowers to Rocket Mortgage.
The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Rocket Homes to stop the company from offering incentives to real estate brokers and agents for directing homebuyers to Rocket Mortgage, LLC for loans. The CFPB also sued Jason Mitchell, his firm JMG Holding Partners LLC (doing business as The Jason Mitchell Group), and the real estate agencies in 41 states and the District of Columbia involved in the unlawful scheme. Rocket Homes allegedly pressured real estate brokers to withhold important information about non-Rocket Mortgage products, like down payment assistance programs. The CFPB seeks to halt this kickback practice, provide consumer restitution, and impose a civil penalty.
“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.”
Rocket Homes Real Estate, LLC, based in Michigan, is an affiliate of Rocket Companies, Inc. (NYSE: RKT), the parent company of Rocket Mortgage, one of the largest mortgage lenders in the U.S. Rocket Homes connects consumers with real estate brokerages across the country.
Latest: CFPB sues Walmart and Branch Messenger
The Jason Mitchell Group, based in Scottsdale, Arizona, operates 45 real estate brokerages in 41 states and the District of Columbia.
According to the CFPB’s investigation, Rocket Homes incentivized real estate brokers to refer clients to Rocket Mortgage and another Rocket affiliate, Amrock, which handles title, closing, and escrow services. The CFPB found that Jason Mitchell’s firm incentivized agents with $250 gift cards for referring clients to Rocket’s services.
The CFPB accuses Rocket Homes of violating the Real Estate Settlement Procedures Act by:
- Providing kickbacks for referrals: Rocket Homes gave incentives like future referrals in exchange for brokers’ and agents’ mortgage and settlement service referrals.
- Requiring brokers and agents to steer clients toward Rocket Mortgage: Agents were pressured to restrict their clients' access to competing lenders and to hide non-Rocket Mortgage products like down payment assistance programs from them.
The CFPB also claims The Mitchell Group and Jason Mitchell violated the Real Estate Settlement Procedures Act by coercing brokers into promoting Rocket Mortgage and Amrock. Agents allegedly warned homebuyers that their settlements could fall through if they chose to shop around for better mortgage rates.
Enforcement Action
Enforcement Action
Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating consumer financial laws. The CFPB also has the authority to enforce the Real Estate Settlement Procedures Act.
The CFPB’s lawsuit against Rocket Homes, The Mitchell Group, and Jason Mitchell seeks a stop to alleged unlawful conduct, redress for harmed borrowers, and the imposition of a civil money penalty, which would be paid into the CFPB’s victims relief fund.
Read today’s complaint against Rocket Homes, The Mitchell Group, and Jason Mitchell.
Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).
Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov. To learn more about reporting potential industry misconduct, visit the CFPB’s website.
Latest Articles:
-
Alec Baldwin's Involuntary Manslaughter Charges Dismissed
-
CFPB sues Walmart and Branch Messenger
-
DraftKings Faces Allegations of Account Closures and Retention of Funds
-
Starbucks Widely Violated Law in Washington, Labor Judge Finds
-
Teacher who raped student, 12, and got pregnant sentenced to 25 years
