The class-action lawsuit filed this week against Rocket Companies and its subsidiaries, which alleges violations of the Real Estate Settlement Procedures Act (RESPA), has drawn heightened attention from the mortgage industry as a wave of mergers and acquisitions accelerates the push toward vertically integrated business models.
Legal experts have described the case as “unique,” saying it raises key issues — including some tied to the fiduciary duties of real estate agents, RESPA’s gray areas and the law’s application to affiliated business arrangements. But mortgage industry attorneys say the lawsuit may face significant hurdles from the outset.
According to the complaint, prospective homebuyers who began their home search through Rocket Homes were connected with third-party real estate agents who agreed to pay Rocket Homes a fee — described in the complaint as a referral fee — of about 35% if they closed a deal as the buyer’s agent.
The lawsuit further alleges that these agents were incentivized to steer clients to Rocket Mortgage in exchange for receiving more referrals, even when loan terms were less favorable to consumers. This resulted in higher interest rates and fewer cost-saving opportunities. Agents who failed to direct clients to Rocket Mortgage allegedly paid higher referral fees, the complaint states.
In another practice cited in the suit, borrowers who obtained a preapproval letter from Rocket Mortgage were allegedly directed to Rocket Homes and matched with a real estate agent. If the borrower ultimately purchased a home using that agent, the brokerage paid Rocket Homes a referral fee — typically around 35% — for services the lawsuit claims Rocket Homes did not actually provide.
“The coercion of the agents is what makes this case unique; they are arguing that Rocket’s strategy was essentially pay-to-play,” said James Brody, managing partner at Brody Gapp LLP. “The most damaging aspect of this complaint is the erosion of the fiduciary wall — a homebuyer trusts that their agent is an independent adviser, and if that adviser is incentivized to prioritize one lender’s loan volume over the borrower’s financial interests, that relationship is arguably compromised.”
Plaintiffs Barbara Waller, Elizabeth Johnson and Randel Clark bought homes between 2021 and 2023 through real estate agents whom they claim did not offer options — or pushed them to use Rocket Mortgage or Amrock, the group’s title company.
They are represented by Hagens Berman, a consumer protection law firm that was also involved in similar litigation against Zillow and the National Association of Realtors. Attorneys for Hagens Berman declined to comment on this story.
A Rocket spokesperson responded to questions from HousingWire by stating: “You’ll find our responses to those questions in our dispositive motions which we will file at the right time.”
Potential sticking points
In the motion to dismiss that is anticipated from Rocket, the judge will consider only the sufficiency of the allegations. But legal experts see additional challenges to the case moving forward, including whether it can be certified as a class action.
“It is where a lot of the battle would occur, at least initially,” said Troy Garris, co-managing partner at Garris Horn LLP. “The plaintiffs would have to show that it makes more sense to litigate as a class rather than individually. To do that, they must demonstrate that the alleged injuries and conduct are sufficiently similar. Here, any proof of harm appears highly individualized, involving different agents and different states.”
Colgate Selden, a shareholder at Baker, Donelson, Bearman, Caldwell & Berkowitz PC, noted that the complaint does not address another RESPA Section 8 exception related to compensation splits under cooperative brokerage and referral arrangements between real estate agents and brokers. (Disclosure: Rocket is a client of the law firm, but Selden — who joined the firm this week — does not represent the lender.)
“They focus on fiduciary obligations, but that’s a state-by-state analysis,” Selden said. “There are waivers of fiduciary duties for many activities in standard agency forms depending on the specific client relationship, so class certification based on this complaint would be tough.”
Another challenge, Selden added, is the one-year statute of limitations in Section 8 for private actions. The complaint argues that each alleged kickback constitutes a separate violation, thereby resetting the statute-of-limitations clock.
Rocket’s initial response to the lawsuit was that “the claims in this case are a complete retread of the case that the Consumer Finance Protection Bureau filed and was quickly dismissed.”
The company was referring to a CFPB complaint, filed in December 2024, that raised similar allegations. It was dismissed in February 2025. The plaintiffs in the current case argue that the dismissal of the prior complaint was tied to the Trump administration’s efforts to weaken the CFPB, rather than the merits of the case.
“Effectively, a regulatory dismissal can be political or resource-driven, while a class action jury trial seeking treble damages is an entirely different ballgame,” said Brody. “The plaintiffs are betting they can prove what regulators may not have had the time — or political will — to pursue.”
History behind the allegations
The lawsuit alleges that a 2019 agreement between Rocket Homes and its partner agents required them to “preserve and protect” clients’ relationships with their chosen lender, Quicken Loans (now Rocket Mortgage).
Agents were also allegedly instructed to promote the benefits of using Quicken and other Rocket-affiliated companies, with warnings that deliberately steering clients away could result in termination of the relationship.
According to the complaint, agent performance — including Quicken loan conversion rates, which were expected to reach 80% of clients — was a key factor in determining referral eligibility. Rocket Homes allegedly used these metrics to decide which agents received referrals and how many.
A 2022 version of the agreement reportedly required agents to notify Rocket Homes when clients were considering alternative lenders. While these provisions were in place for five years, the complaint argues that their “spirit” continued beyond that period.
According to the CFPB’s investigation, an estimated 50% of all penalties assessed by Rocket Homes against agents stemmed from violations of the “preserve and protect” requirement.
“Plaintiffs seem to rely heavily on the idea that the company pressured agents to refer business internally,” Garris said. “But pressuring an agent is not necessarily the same as pressuring a borrower, or requiring a borrower to use a particular lender. The devil, of course, is in the details.”
While RESPA prohibits quid pro quo payments, called kickbacks, it permits a wide range of other compensatory arrangements, leaving room for interpretation.
Payments for lead generation or desk rentals, for example, are typically permissible — but only if they reflect reasonable market value and correspond to actual services provided. Regulators may also require detailed proof of these services, otherwise, such payments could be deemed as unlawful referral fees, attorneys said.
“The allegations suggest that Rocket Homes established different market rates for leads depending on whether agents sent loans to Rocket Mortgage,” said Ron Gapp, founding partner of Brody Gapp LLP. “That differential treatment is where potential RESPA issues could arise.”
Acquiring Redfin to cover their tracks?
Following the dismissal of the CFPB case, Rocket acquired real estate brokerage Redfin for $1.75 billion — a move the lawsuit characterizes as a “maneuver” to bring the alleged steering practices in-house.
The plaintiffs allege, on information and belief, that Rocket knew its conduct was “illegal.” The acquisition added more than 2,200 agents to Rocket’s network.
According to the lawsuit, “Rocket provides Redfin agents with increased referrals, a thing of value, in exchange for agents referring clients to Rocket Mortgage, a thing of value. Requiring agents to give referrals to Rocket Mortgage to receive leads is evidence of an illegal steering scheme and unjust enrichment.”
Attorneys said RESPA has generally been interpreted to permit affiliated business arrangement referrals, provided that certain conditions are met. For instance, the referring party must give proper affiliated business disclosures, cannot require the borrower to use the affiliated entity, and must receive nothing of value beyond a return on ownership interest.
The plaintiffs allege violations of RESPA and unjust enrichment. they are seeking treble damages, single damages, disgorgement and injunctive relief to halt Rocket’s alleged steering practices.
Sarah Wolak contributed reporting to this story.
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