The Consumer Financial Protection Bureau alleges that Rocket provided real estate agents with incentives to drive consumers away from other companies. Lockett has called the allegations “lies” and a political ploy.
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A new lawsuit from the Consumer Financial Protection Bureau accuses Lockett Homes of using an illegal kickback system to induce agents to drive customers to the company, an allegation Lockett said He says it’s a “lie”.
The Consumer Financial Protection Bureau (CFPB) filed the lawsuit on Monday. The purpose of the lawsuit is to stop Rocket Homes from offering incentives to agents and brokers “in exchange for directing homebuyers to Rocket Mortgage LLC for loans,” the agency said in an accompanying statement. said. CFPB Director Rohit Chopra added in a statement that the system “prevents homebuyers from comparing and getting the best deal.”
Rohit Chopra
“At a time when homeownership feels out of reach for many, companies should not illegally block competition by driving up home prices,” Chopra added.
Lockett responded in a statement to Inman, calling the CFPB’s “claims false and a distortion of reality.”
“The accusation that homebuyers paid more when working with Rocket Homes is false,” the company added in a statement. “Additionally, the idea that Rocket Homes penalized real estate agents and agents for helping customers compare interest rates and choose the best lender is also false.”
The company added that data shows that “one-third of consumers who had already applied for a loan with Rocket Mortgage chose to engage with another lender before contacting Rocket Homes.” pointed out. Rocket says this shows the company is empowering homebuyers to “make the best decision for their unique needs.”
Lockett also vowed to fight the allegations and suggested the lawsuit was a political ploy on Chopra’s part.
“Secretary Chopra’s blatant ploy to shore up his political agenda in the face of a change in government is a reckless and shocking misuse of public resources,” Rocket News said in a statement. “This flimsy lawsuit is just the latest in a long line of lawsuits by a desperate, headline-hungry Mr. Chopra.”
It remains to be seen which side will prevail in court. But in the meantime, the CFPB statement claims the alleged kickbacks included homebuyer referrals and priority for future referrals. The deal also requires real estate professionals referred to Rocket to steer their clients away from other lenders, and also requires “brokers and agents to share valuable information with their clients about products not offered by Rocket Mortgage.” The statement added:
The CFPB alleges in a statement that Lockett’s actions violate the Real Estate Settlement Procedures Act, a 1975 law that specifically prevents kickbacks.
News that the CFPB was investigating Rocket first surfaced in 2020 through regulatory filings on the eve of the company’s initial public offering. The purpose of the investigation was to determine whether Lockett engaged in illegal activities to boost his business.
In addition to Lockett, the lawsuit also includes broker Jason Mitchell and his company. Mitchell is based in Arizona, but his company has operations in 41 states and Washington, DC.
On LinkedIn, Jason Mitchell Group advertises itself as “America’s largest B2B real estate brokerage.” The Mitchell Group “referred thousands of customers to Rocket Mortgage and a Rocket affiliate called Amrock,” according to the statement. Agents who referred the most Mitchell Group preferred partners, including Rocket, received gift cards, according to a statement.
Inman has reached out to Mitchell’s company for comment and will update this article if it responds.
The statement concludes by saying that the lawsuit “seeks an enjoinment of the illegal conduct, relief for injured borrowers, and the imposition of civil penalties to be paid to the CFPB’s Victim Relief Fund.” The complaint does not specify the amount the CFPB is seeking.
Read the CFPB complaint here (refresh the page if the document doesn’t load).
Email Jim Dalrymple II
