Rocket Mortgage Sued: Class-Action Lawsuit Over Illegal Steering Allegations

Homebuyers sue Rocket Mortgage for allegedly forcing agents to steer clients toward their lending services, violating RESPA and resulting in higher costs for consumers following a CFPB investigation.

3 property buyers are taking legal action against Rocket Home loan, declaring that the firm obliged property agents to steer the customers into making use of the firm’s home borrowing solutions in violation of the Property Settlement Procedures Act (RESPA).

Alleged Violations of RESPA

The issue alleges that before its acquisition of Redfin in 2015, Rocket Houses ran a big recommendation network with its site which linked prospective property buyers with third-party real estate agents. Those agents were needed to pay a 35% reference charge if they closed on an offer as a purchaser representative.

The complainants also allege that a four-year investigation by the Customer Financial Protection Bureau (CFPB), which submitted a legal action versus Rocket in December 2024, discovered a number of the methods mentioned in the problem.

“For these leads, representatives were required to steer customers to Rocket Home mortgage, LLC (Rocket’s home mortgage business) and far from other home loan providers– done in infraction of a real estate representative’s fiduciary tasks to her clients,” according to the declaring.

CFPB Findings and Higher Interest Rates

“Based upon this examination, it was disclosed that customers were directly damaged by the guiding method due to the fact that Rocket Home loan and its precursor, Quicken Loans, provided low-grade lending plans. … As an outcome of these subpar financings, ‘Rocket Home mortgage billed higher prices and fees to consumers who went through the Rocket Houses network compared with consumers that really did not experience the network,'” the filing states, citing the CFPB issue.

“Rocket recognized and acknowledged that it was taken part in illegal steering, and– after it was caught by the CFPB– decided to obtain Redfin to bring the steering method in-house,” according to the filing.

Pressure on Homebuyers and Market Trends

The three homebuyer complainants– Barbara Waller, Elizabeth Johnson and Randel Clark– all claim that realty agents pressed them to choose Rocket Mortgage, or presented the lender as the only home loan alternative, in offense of RESPA.

The home search site has actually additionally been charged of incentivizing agents to guide customers to its home loan division. The most recent situation facing Zillow was submitted last week by a Washington realty agent and includes accusations similar to those in the Taylor and Armstrong situations, two claims filed versus Zillow in the fall and merged in December.

“The claims in this instance are a full retread of the case that the CFPB submitted and was rapidly dismissed,” the spokesperson claimed. “Rocket is pleased to aid buyers navigate complex property partnerships. We are positive that we will be proven when truths are presented.”

The complainants also say that Rocket has remained to motivate guiding by non-affiliated representatives given that the Redfin acquisition. “Rocket still makes recommendations to third-party agents. Rocket costs these third-party agents a greater reference cost if these representatives do not guide their customers to Rocket Home mortgage,” the filing states.

Rocket’s Legal Response and Defense

The class-action claim, filed Jan. 26 in the U.S. Area Court for the Eastern District of Michigan, charges the business of having “manipulated the susceptability of home buyers for profit,” according to a news release from Hagens Berman, the law practice taking care of the situation.

The complainants also claim that Rocket has proceeded to encourage steering by non-affiliated agents considering that the Redfin acquisition. “Rocket still makes references to third-party representatives. Rocket costs these third-party representatives a greater reference cost if these representatives do not guide their clients to Rocket Mortgage,” the declaring states.

A Rocket speaker said the business “categorically differs” with the problem, and the firm “will challenge the allegations that Rocket, Redfin or any one of the named accuseds are doing anything illegal.”