Quicken Loans, the nation’s largest mortgage lender, said the Consumer Financial Protection Bureau is investigating its real estate affiliate for potential violations of the Real Estate Settlement Procedures Act.
The CFPB issued a civil investigative demand in May to Rocket Homes Real Estate, the lender’s broker fee network, according to paperwork Quicken Loans filed last week in connection with its initial public offering. The lender announced plans earlier this month to go public under the name Rocket Companies Inc.
Rocket Homes is a unit of the Detroit company that collects fees by matching consumers with local real estate agents.
“In May 2020, the CFPB issued a civil investigative demand to our subsidiary, Rocket Homes, the stated purpose of which is to determine if Rocket Homes conducted any activities in a manner that violated RESPA and to determine if further CFPB action is necessary,” Rocket Companies disclosed in a
RESPA prohibits illegal kickbacks and referral fees by real estate settlement service providers that can drive up the cost of a home loan. But the 46-year-old law has an exception that allows for payment or compensation for actual goods or servicers, even if a referral is involved.
The Detroit company's market share jumped to 9.2% in the first quarter of 2020, up from 1.3% in 2009, according to the filing.
In 2018, the CFPB dropped a RESPA investigation into Zillow Group after a district court dismissed claims that the Seattle real estate company allowed real estate agents to make illegal mortgage referrals.
