US accuses Rocket Homes of illegal kickbacks in mortgage scheme
7:48 pm Monday, December 23rd, 2024
(Reuters) -The top U.S. watchdog agency for consumer finance on Monday accused Rocket Homes, a unit of Rocket Companies, and The Jason Mitchell Group of real estate brokerages of an illegal kickback scheme to steer mortgage applications back to Rocket.
According to the Consumer Financial Protection Bureau, Rocket Homes, one of the largest mortgage lenders in the United States, plied the real estate brokerages with referrals and other inducements so that the brokers and agents would steer real estate settlement business back to a Rocket affiliate.
Jason Mitchell allegedly offered “dog bone” awards of $250 gift cards to agents making the most referrals back to favored partners, including Rocket affiliates Amrock and Rocket Mortgage, according to the CFPB.
“Rocket engaged in a kickback scheme that discouraged home-buyers from comparison shopping and getting the best deal,” CFPB 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.”
Rocket Homes rejected the CFPB’s allegations, calling the lawsuit “flimsy” and vowing to fight it.
“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 company said in a statement. “This proves Rocket Homes is committed to empowering home-buyers to make the best decisions for their unique needs.”
Representatives for The Jason Mitchell Group did not immediately respond to a request for comment.
Monday’s announcement marked the third major action by the CFPB since Friday, following lawsuits against Walmart as well as JPMorgan Chase, Bank of America, and Wells Fargo over those banks’ alleged mishandling of fraud on peer-to-peer payments.
(Reporting by Douglas Gillison; Editing by Mark Porter and Aurora Ellis)
