Cfpb Sues Rocket, the Jason Mitchell Group Over respa Violations

The Consumer Financial Protection Bureau (CFPB) filed a lawsuit Monday accusing Rocket Homes of orchestrating a kickback scheme to funnel business to its sister companies, Rocket Mortgage and Amrock. The Jason Mitchell Group is also implicated in the alleged violations of the Real Estate Settlement Procedures Act (RESPA).

According to the CFPB, between 2019 and 2024, real-estate brokerage firm Rocket Homes purportedly incentivized real estate brokers and agents with referrals and priority for future referrals in exchange for steering clients toward mortgage lender Rocket Mortgage and settlement firm Amrock, which are also under the umbrella of Detroit-based Rocket Companies. 

The Jason Mitchell Group and its founder, Jason Mitchell, allegedly participated by referring thousands of clients 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 competing lenders’ information, including details about down-payment assistance programs. At The Jason Mitchell Group, agents were supposedly trained to suggest transactions could fail if clients shopped around for other mortgage options. 

Rocket Homes responded to the lawsuit with these comments: “The CFPB’s allegations are false and a distortion of reality. The accusation that homebuyers paid more when working with Rocket Homes is a lie. Additionally, the notion that Rocket Homes penalized real estate brokers or agents for helping clients compare rates and choose the best lender for them is also a lie.

“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. This proves Rocket Homes is committed to empowering homebuyers to make the best decisions for their unique needs. Rocket Homes has always focused on connecting buyers with top-performing agents based on measurable success metrics.

“Director Chopra’s transparent ploy to bolster his political agenda before the changing of administrations is a reckless and shocking misuse of public resources. This flimsy lawsuit is just the latest in a tidal wave of legal actions by a desperate Chopra hungry for headlines. Rocket Homes will not rest until these baseless allegations are fully dismissed, and the CFPB redirects its focus to real issues that genuinely impact consumers.”

The Jason Mitchell Group did not immediately respond to requests for comment.

Rocket Homes, Jason Mitchell, and JMG Holding Partners LLC (dba The Jason Mitchell Group), along with affiliated brokerages 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 homebuyers 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.” 

According to the lawsuit, Rocket Homes operates a large referral network matching potential homebuyers with real estate brokerage firms, which pays a referral fee to Rocket, typically calculated as 35% of the brokerage’s commission.

But real estate brokerage firms and agents steered consumers away from competitors to close 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.

Per the lawsuit, the company “threatened, suspended, and sometimes removed real estate agents that didn’t adequately steer their clients away from other mortgage lenders.”

“Rocket Homes also repeatedly pressured real estate brokerages to hit a capture rate of 80%. This meant that, of the Rocket Homes consumers who were referred to a real estate brokerage and ended up buying a home, Rocket Homes wanted at least 80% of those consumers to get their mortgage from Rocket Mortgage,” the lawsuit stated. 

In previous enforcement actions related to claims of kickbacks, the Bureau issued orders against Freedom Mortgage Corporation and Realty Connect USA Long Island in mid-August 2023, its first such enforcement action since 2017.