U.S. Consumer Regulator Sues Rocket Homes For Illegal Kickback Scheme

(RTTNews) - The U.S. Consumer Financial Protection Bureau or CFPB has filed a lawsuit against Rocket Homes Real Estate, LLC, affiliated to Rocket Companies, Inc., as well as the Jason Mitchell Group real estate brokerages for allegedly involving in an illegal Kickback Scheme to steer borrowers to Rocket Mortgage LLC.

The lawsuit seeks Rocket Homes, the Mitchell Group, and its owner Jason Mitchell to stop the kickback scheme, provide consumer redress, and obtain a civil penalty, which will be deposited into the CFPB's victims relief fund.

Michigan-based Rocket Homes allegedly provided kickbacks to real estate brokers and agents to steer prospective borrowers to Rocket Mortgage. The CFPB accused that Rocket Homes pressurized 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 US Government watchdog alleged that Rocket Homes violated the Real Estate Settlement Procedures Act.

With the lawsuit, Rocket Homes is required to stop providing incentives to real estate brokers and agents in exchange for steering homebuyers to Rocket Mortgage for loans.

Further, the CFPB sued Jason Mitchell, his real estate brokerage firm, JMG Holding Partners LLC, which does business as the Jason Mitchell Group, and the individual real estate brokerage companies in the 41 states and the District of Columbia where it does business, for their role in the unlawful scheme.

The probe showed that The Mitchell Group referred thousands of clients to Rocket Mortgage and Amrock. Jason Mitchell offered 'Dog Bone' awards of $250 gift cards to Mitchell Group agents who made the most referrals to the Mitchell Group's favored partners, including Rocket Mortgage and Amrock.

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."

On the NYSE, Rocket Companies' shares closed Monday's regular trading at $11.35, down 3.98%. In pre-market activity, the shares were gaining 2.1 percent to trade at $11.59.