Rocket hit with RESPA class-action lawsuit
Similar to recent lawsuits filed against Zillow, the homebuyer plaintiffs say they were pressured by agents who steered them toward Rocket’s lending services.
Key points:
- A group of homebuyers claims agents in Rocket's referral program were "required to steer clients to Rocket Mortgage."
- The plaintiffs are represented by the same law firm involved in suing Zillow over RESPA and RICO violations.
- The complaint notes that Rocket was the subject of a four-year CFPB investigation related to similar conduct.
Three homebuyers are suing Rocket Mortgage, alleging that the company compelled real estate agents to steer the buyers into using the company's home lending services in violation of the Real Estate Settlement Procedures Act (RESPA).
The class-action lawsuit, filed Jan. 26 in the U.S. District Court for the Eastern District of Michigan, accuses the company of having "exploited the vulnerability of home buyers for profit," according to a news release from Hagens Berman, the law firm handling the case.
The firm, which represented the home sellers in the Moerhl commissions case, is also representing plaintiffs in a similar lawsuit against Zillow over claims of steering clients into its lending arm, Zillow Home Loans.
The plaintiffs in the Rocket case are asking for class status, suggesting that the class could number in the "hundreds of thousands," with damages to be determined at trial.
Real Estate News has reached out to Rocket for comment on the lawsuit.
Agents 'required to steer clients to Rocket'
The three homebuyer plaintiffs — Barbara Waller, Elizabeth Johnson and Randel Clark — all claim that real estate agents pressured them to choose Rocket Mortgage, or presented the lender as the only mortgage option, in violation of RESPA.
The complaint alleges that prior to its acquisition of Redfin last year, Rocket Homes operated a large referral network through its website which connected potential homebuyers with third-party real estate agents. Those agents were required to pay a 35% referral fee if they closed on a deal as a buyer agent.
"In exchange for these leads, agents were required to steer clients to Rocket Mortgage, LLC (Rocket's mortgage company) and away from other mortgage providers — all in violation of a real estate agent's fiduciary duties to her clients," according to the filing.
Previous regulatory scrutiny
The plaintiffs also allege that a four-year investigation by the Consumer Financial Protection Bureau (CFPB), which filed a lawsuit against Rocket in December 2024, uncovered many of the practices cited in the complaint.
"Based on this investigation, it was revealed that consumers were directly harmed by the steering practice because Rocket Mortgage and its predecessor, Quicken Loans, offered substandard loan packages. … As a result of these substandard loans, 'Rocket Mortgage charged higher rates and fees to consumers who went through the Rocket Homes network compared with consumers who didn't go through the network,'" the filing states, citing the CFPB complaint.
"Rocket knew and recognized that it was engaged in illegal steering, and — after it was caught by the CFPB — decided to acquire Redfin to bring the steering practice in-house," according to the filing.
The CFPB dropped the case in February 2025, however, after much of the agency was shuttered.
The plaintiffs also say that Rocket has continued to encourage steering by non-affiliated agents since the Redfin acquisition. "Rocket still makes referrals to third-party agents. Rocket charges these third-party agents a higher referral fee if these agents do not steer their clients to Rocket Mortgage," the filing states.
'A complete retread' of dismissed CFPB case, Rocket says
A Rocket spokesperson said the company "categorically disagrees" with the complaint, and the company "will dispute the allegations that Rocket, Redfin or any of the named defendants are doing anything illegal."
"The claims in this case are a complete retread of the case that the CFPB filed and was quickly dismissed," the spokesperson said. "Rocket is proud to help homebuyers navigate complex real estate partnerships. We are confident that we will be vindicated once facts are presented."
'Hundreds of thousands' of potential class members
Steve Berman, managing partner of Hagens Berman, said they believe "hundreds of thousands of consumers have been duped by Rocket's tricks."
"Everyday families rely on the laws governing our nation's real estate market for fairness and transparency, and we believe Rocket has failed to play by the rules," Berman said in the news release.
Zillow's RESPA complaints
The home search portal has also been accused of incentivizing agents to steer buyers to its mortgage division. The most recent case facing Zillow was filed last week by a Washington real estate agent and includes allegations similar to those in the Taylor and Armstrong cases, two lawsuits filed against Zillow in the fall and merged in December.