CFPB Sues Rocket, The Jason Mitchell Group for RESPA Violations
The Consumer Financial Protection Bureau (CFPB) filed a lawsuit Monday alleging allegations Rocket houses of organizing a kickback scheme to divert business to sister companies, Rocket mortgage And Amrock. The Jason Mitchell group is also involved in alleged violations of the Real Estate Settlement Procedures Act (RESPA).
According to the CFPB, between 2019 and 2024, real estate broker Rocket Homes allegedly incentivized real estate brokers and agents with referrals and prioritized future referrals in exchange for sending customers to mortgage lender Rocket Mortgage and settlement firm Amrock, which are also covered by the scheme. established the Detroit umbrella Rocket companies.
The Jason Mitchell Group and its founder, Jason Mitchell, allegedly participated by referring thousands of customers to Rocket’s companies. The lawsuit details practices including $250 “Dog Bone” gift cards awarded to agents who made the most referrals to Mitchell’s preferred partners, including Rocket Mortgage.
Meanwhile, Rocket allegedly restricted brokers and agents from sharing information from competing lenders, including details about down payment assistance programs. At the Jason Mitchell Group, agents were allegedly trained to suggest transactions could fall through if customers looked for other mortgage options.
Rocket Homes responded to the lawsuit with the following comment: “The CFPB’s allegations are false and a distortion of reality. The accusation that homebuyers paid more when they worked with Rocket Homes is a lie. Furthermore, the idea that Rocket Homes penalizes real estate brokers or agents for helping customers compare rates and choose the best lender for them is also a lie.
“The facts are clear: data shows that one-third of consumers with a loan application already in progress with Rocket Mortgage before contacting Rocket Homes chose to take out the loan with another lender. This proves Rocket Homes’ commitment to empowering homebuyers to make the best decisions for their unique needs. Rocket Homes has always focused on connecting buyers with the best performing agents based on measurable success metrics.
“Director Chopra’s transparent ploy to strengthen his political agenda before the change of government is a reckless and shocking misuse of public resources. This flimsy lawsuit is just the latest in a tidal wave of legal actions from a desperate, news-hungry Chopra. Rocket Homes will not rest until these baseless allegations are fully dismissed, and the CFPB shifts its focus to real issues that actually impact consumers.”
Mitchell said he rejected a settlement agreement with the CFPB.
“Last Friday, after three years of back and forth, I was offered a settlement from the CFPB for $200,000 and I could move on,” he said. wrote on a LinkedIn message on Monday afternoon. “I could have easily taken that route. HOWEVER, the “terms” of the consent order would allow things that are simply not true. I found myself saying, do I put this behind me or do I fight and stand up for what is 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.”
Rocket Homes, Jason Mitchell and JMG Holding Partners LLC (dba) The Jason Mitchell Group, along with affiliated brokerage firms operating in 41 states and the District of Columbia, are named as defendants in the case filed in the U.S. District Court for the Eastern District of Michigan.
“Rocket engaged in a kickback scheme that discouraged home buyers from comparing and getting the best deal,” CFPB Director Rohit Chopra said in a statement. “At a time when homeownership seems out of reach for so many, companies should not illegally block competition in ways that drive up the cost of housing.”
According to the lawsuit, Rocket Homes operates a large referral network that matches potential home buyers with real estate agents, who pay a referral fee to Rocket, typically calculated as 35% of the agent’s commission.
But real estate agents and brokers steered consumers away from competitors to make deals with Rocket Mortgage, where borrowers were charged higher rates and fees than consumers who didn’t go through the Rocket Homes network, the CFPB said.
According to the lawsuit, the company has “threatened, suspended, and sometimes removed real estate agents who did not adequately divert their clients from other mortgage lenders.”
“Rocket Homes has also repeatedly pressured real estate agents to achieve an 80% takeover rate. This meant that of the Rocket Homes consumers who were referred to a real estate agent and ultimately purchased a home, Rocket Homes wanted at least 80% of those consumers to get their mortgage from Rocket Mortgage,” the lawsuit said.
In previous enforcement actions involving kickback claims, the Bureau has issued orders Freedom Mortgage Company And Realty Connect USA Long Island in mid-August 2023, the first such enforcement action since 2017.
