Rocket Homes Spared from CFPB Enforcement

Two months after being sued by the Consumer Financial Protection Bureau, Rocket Homes is no longer under the government’s spotlight.

The CFPB dismissed a lawsuit against Rocket alleging an illegal kickback scheme for real estate agents, CNBC reported. The dismissal occurred simultaneously with a confirmation hearing for Jonathan McKernan, who has been nominated to lead the bureau.

It was one of four lawsuits dismissed on Thursday by the CFPB, with a lawsuit accusing Vanderbilt Mortgage & Finance of ignoring signs that its customers couldn’t afford mortgages also cast aside. The lawsuits were dismissed with prejudice, meaning the bureau can’t raise the claims again.

In a statement, Rocket said it was “proud to put this matter behind us.”

The CFPB filed its lawsuit against Rocket in December, accusing the Michigan-based company of providing incentives to real estate brokers to steer mortgage clients its way. The company allegedly pressured brokers and agents not to share important information with clients regarding services offered by competitors, such as down payment assistance programs.

As part of the same action, the CFPB also sued The Jason Mitchell Group brokerage for its role in the alleged scheme. The bureau sought an end to the alleged kickback scheme, as well as civil penalties and “consumer redress.”

““Rocket engaged in a kickback scheme that discouraged homebuyers from comparison shopping and getting the best deal,” CFPB director Rohit Chopra said when the lawsuit was filed.

But the new administration has sought to reverse many of the decisions made under Joe Biden. The CFPB is in danger according to employees, who say the agency is planning to fire nearly all of its 1,700 employees and wind down operations, CNBC reported.

The agency’s former head of enforcement, Eric Halperin, said there were “billions of dollars in consumer harm that the CFPB will never be able to get back for consumers” after the dismissal of the lawsuits. He noted that prior to the Trump administration, the agency only dismissed one lawsuit without consumer relief.

— Holden Walter-Warner