CFPB Calls Out "Illegal Kickback Scheme" at Major Mortgage Company to Block Competition…

Well, well, well… it looks like Rocket Homes, the mortgage arm of Rocket Companies, just got hit with the regulatory version of a “we need to talk” text. And spoiler: the CFPB (Consumer Financial Protection Bureau) is not happy.

(Source: Giphy) 

According to the watchdog that keeps Wall Street and Main Street in check, Rocket Homes allegedly played a little too fast and loose with the rules by teaming up with The Jason Mitchell Group, a real estate brokerage, to run what they're calling an “illegal kickback scheme.” Think of it like a slimy version of “you scratch my back, I’ll Venmo you $250”—except instead of Venmo, it was gift cards and referrals.

(Source: Reuters) 

In short, the CFPB claims Rocket Homes dangled incentives to real estate brokers and agents to send mortgage applications back to Rocket affiliates like Rocket Mortgage and Amrock. And because nothing screams “totally above board” like a $250 “dog bone” award (yes, that’s what they actually called it), Jason Mitchell allegedly handed out these gift cards to agents who delivered the most referrals.

CFPB Director Rohit Chopra didn’t hold back with this one. He slammed Rocket, saying their scheme discouraged homebuyers from shopping around for better mortgage deals. Or, in plain English: Rocket’s alleged antics may have made your dream home just a little more expensive. “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,” Chopra said. Translation: Rocket, you’re not helping.

(Source: CNN) 

On the other hand though, Rocket isn’t going down without a fight here. In a statement that showed their frustration levels, Rocket Homes called the CFPB’s lawsuit “flimsy” and trotted out some stats to back it up. They claim a third of customers who applied for a Rocket Mortgage loan after contacting Rocket Homes still chose a different lender. Basically, they’re argument is that people still have options—so don’t blame them if their branding is better. 

Meanwhile, The Jason Mitchell Group has been radio silent—probably too busy Googling “how to lawyer up when the government comes knocking.” LOL

(Source: Giphy) 

Now with that said, this isn’t Rocket’s first tango with regulators, however it’s definitely an eye-brow raiser. Monday’s announcement is just the latest in a CFPB crusade that also saw lawsuits against Walmart, JPMorgan Chase, Bank of America, and Wells Fargo over alleged fraud-related shenanigans. Looks like the CFPB woke up Friday morning and chose chaos.

Plus, with the mortgage world already a clusterf**k fiasco, this situation with Rocket Homes just adds some zestiness to the drama. In the end, if you’re looking to buy a house soon… Well, choose wisely. No matter which way you turn, there’s always someone looking to siphon a few more dollars off your decisions.

In the meantime, have one helluva Christmas Eve and stay safe and stay frosty, friends! Until next time…

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Stocks.News does not hold positions in companies mentioned in the article.