Federal regulators filed a lawsuit Monday against Rocket Homes Real Estate and The Jason Mitchell Group (JMG), alleging an illegal referral scheme that steered homebuyers toward specific mortgage and settlement services, according to a complaint filed by the Consumer Financial Protection Bureau (CFPB).
Rocket Homes allegedly provided real estate brokerages with referrals and preferential treatment in exchange for client leads to Rocket Mortgage for home loans and to Amrock for title and closing Services. All three companies are subsidiaries of Detroit-based Rocket Companies, Inc.
“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.”
The lawsuit also names Scottsdale, Arizona-based Jason Mitchell Group, which operates in 41 states and Washington, D.C., along with 45 of its affiliates and CEO Jason Mitchell. The CFPB alleges the group accepted valuable consideration for referring thousands of clients to Rocket Mortgage and Amrock over five years, from 2019 to 2024.
The CFPB claims that Rocket Homes required brokers to receive referrals to “preserve and protect” relationships with Rocket Mortgage by directing clients away from competing lenders. Brokers were also prevented from informing their borrower-clients about alternatives not offered by Rocket Mortgage, including down payment assistance programs, the complaint alleges.
The lawsuit alleges that Mitchell incentivized his agents with $250 “dog bone” gift card awards for making the most referrals to Rocket and Amrock.
Further, “The Mitchell Group encouraged its network of real estate brokers and agents to engage in coercive tactics to get consumers to use Rocket Mortgage for their home loans. Agents were trained to suggest that house settlements could fall through if the homebuyer wanted to comparison shop with Rocket Mortgage’s competitors,” the complaint alleges.
Federal regulators say these practices violate the Real Estate Settlement Procedures Act (RESPA) and Regulation X, prohibiting giving or receiving gifts or financial kickbacks in exchange for business referrals.
The CFPB is seeking undisclosed civil penalties, consumer redress and a stop to the alleged unlawful violations of RESPA, according to the complaint.
Rocket Homes pushed back on the CFPB’s lawsuit in a lengthy statement sent to RISMedia when reached by email Monday.
“The CFPB’s allegations are false and a distortion of reality. The accusation that homebuyers paid more when working with Rocket Homes is a lie,” the statement read. “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.
“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. 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.
“Director Chopra’s transparent ploy to bolster his political agenda before the changing of administrations is a reckless and shocking misuse of public resources. This flimsy lawsuit is just the latest in a tidal wave of legal actions by a desperate Chopra hungry for headlines.
“Rocket Homes will not rest until these baseless allegations are fully dismissed, and the CFPB redirects its focus to real issues that genuinely impact consumers.”
Late Monday Jason Mitchell posted a video on LinkedIn also pushing back. The comment on his post reads, “Early today the CFPB filed a lawsuit against JMG making false claims about steering. This past Friday, after 3 years of going back and forth I was offered a settlement from the CFPB for 200k to be done and move on. I could have easily taken that route. HOWEVER, The “terms” of the consent order would have (us) admitting things that simply are not true. I found myself saying do I put this behind me or do I fight and stand up for what’s right. I choose to stand up and fight because JMG is being used as a pawn in this case. So, we will prove our point and go from there. It’s not the easy road but honestly the easy road was wrong. Have to stand up when you know you are right even if the easy road is, well, easy.”
