Rocket lays out its steering protection in RESPA lawsuit

Rocket Cos. is laying out its protection towards steering accusations from shoppers, claims which stem from a regulator’s yearslong probe.

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Three plaintiffs sued the lender in January, reviving a Actual Property Settlement Procedures Act grievance raised by the Client Monetary Safety Bureau. The lawsuit accuses the corporate of steering clients on its Rocket Houses referral community to make use of its mortgage arm, and of compelling brokers to pay 35% of their commissions to Rocket Houses as a kickback.

The allegations stem from the CFPB’s four-year investigation into Rocket, which culminated with its lawsuit in December 2024. The Trump administration dropped that case early final yr, a part of the bureau’s bigger pullback from enforcement exercise. 

The brand new go well with suggests Rocket bought Redfin last year to deliver its steering conduct in-house. Rocket has denied wrongdoing, and has countered the accusations in back-and-forth filings with plaintiffs this spring in a Michigan federal courtroom. 

In a 16-page reply this week, Rocket says its conduct is protected by RESPA’s cooperative brokerage safe harbor. The corporate additionally claims its actions didn’t contain an alternate of issues of worth, akin to financial funds which had been on the middle of different steering circumstances.

Neither attorneys for the events nor a spokesperson for Rocket responded to requests for remark this week.

Rocket’s reply to steering accusations

In response to plaintiffs, Rocket violated RESPA starting in 2019 by sending results in actual property brokers provided that they steered purchasers to Rocket Mortgage. Plaintiffs citing the CFPB’s earlier claims mentioned an “estimated 50% of all of the penalties Rocket Houses assessed on actual property brokers” had been for violations of their purported steering agreements. 

Such exercise resulted in additional than 10,000 further referrals despatched to Rocket Mortgage in 2019 in comparison with the prior yr, the grievance learn.

Rocket refuted these factors, stating that the language in its “protect and defend” coverage merely required brokers to keep away from interfering with a consumer’s pre-existing relationship with a lender. Attorneys for Rocket cited the secure harbor, in arguing that nothing in anti-kickback guidelines for originators prohibits funds, or referral funds, between actual property brokers (Rocket Houses) and third-party brokers.

Plaintiffs contested that argument in an earlier submitting final month. 

“In searching for secure harbor succor, defendants fake that Rocket Mortgage just isn’t concerned within the steering operation, which is nonsense,” wrote attorneys for the plaintiffs. 

The perimeters additionally dispute standing. Whereas Rocket argues the plaintiffs have not pled particular accidents, the purported victims say the very fact of overpayment, in being steered to higher-cost loans, is ample. Rocket can also be contesting the statute of limitations, as they counsel the claims ought to be time-barred from the time of the alleged referrals. 

Rocket is one in every of several large lenders combating steering claims, though the alleged RESPA violations towards every agency fluctuate. Lawsuits towards CrossCountry Mortgage, Loandepot and United Wholesale Mortgage stay pending in varied courthouses.