A company that matches people looking to buy homes with real estate brokers engaged in an alleged kickback scheme to benefit its affiliated mortgage lender, according to a U.S. government lawsuit filed with the Eastern Michigan federal court on Monday.
The Consumer Financial Protection Bureau says Rocket Homes required brokers to steer homebuyers to the company’s sister firm, Rocket Mortgage, providing referrals of new customers in exchange. This type of arrangement is illegal under federal law because it encourages brokers to exploit consumers who rely on them, the lawsuit claims. Both Rocket affiliates are subsidiaries of Rocket Cos. Inc.
Rocket Homes issued a statement calling the allegations "false and a distortion of reality."
Some customers didn’t learn about first-time homebuyer down payment assistance programs or low-interest loans they might have been eligible for because brokers directed them to Rocket Mortgage, which didn’t offer those products at the time, the lawsuit said. Brokers felt they couldn't inform buyers about these options because of the arrangement with Rocket.
“Rocket engaged in a kickback scheme that discouraged homebuyers from comparison shopping and getting the best deal,” bureau director Rohit Chopra said in a statement. “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.”
Brokerage also named in suit
The lawsuit also accuses real estate brokerage The Jason Mitchell Group and its affiliates in numerous states of collaborating with Rocket in the alleged scheme. The brokerage encouraged agents to use “coercive tactics” to steer customers to Rocket Mortgage, according to the suit, including warning clients they could lose the homes they wanted if they sought a loan from a competitor.
Rocket Homes said in an emailed statement that it was a lie to suggest that homebuyers paid more as a result of working with the company, or that it penalized brokers for giving buyers information about other lenders.
“Director Chopra’s transparent ploy to bolster his political agenda before the changing of administrations is a reckless and shocking misuse of public resources,” the company said, referring to the shift from President Biden to President-elect Donald Trump taking place in January 2025.
The Jason Mitchell Group did not immediately respond to a request to comment.
In addition to Rocket Mortgage, the government said brokers were pushed to direct customers to work with Amrock, another Rocket Companies affiliate that provides title, escrow and settlement services to homebuyers. The Jason Mitchell Group offered awards of $250 gift cards to agents who steered the most buyers to Rocket Mortgage and Amrock, according to the suit.
Rocket Homes collects a fee, calculated as 35% of a broker’s commission, for referring customers if they eventually buy a home through that agent, the government said. But the parent company makes “significantly more money” if the buyer borrows money to buy the home through Rocket Mortgage.
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In 2019, the year the alleged kickback scheme began, brokers directed 10,000 more customers to Rocket Mortgage than they had the previous year, the CFPB said. The agency said Rocket Homes didn’t end its requirement for brokers to steer customers to its lending affiliate until March 2024.
This is not the first time this year Rocket has tangled in court with the federal government. The U.S. Justice Department sued Rocket Mortgage in October for failing to help a Denver homeowner who said the company’s third-party appraiser undervalued her home because she was Black. Rocket sued the U.S. Department of Housing and Urban Development this month, claiming the company is barred by law from fixing a faulty appraisal.
