CFPB Files Lawsuit to Stop Illegal Kickback Scheme to Steer Borrowers to Rocket Mortgage

The Consumer Financial Protection Bureau (CFPB) has sued Rocket Homes  to stop them from providing incentives to real estate brokers and agents in exchange for steering homebuyers to Rocket Mortgage, LLC for loans. The CFPB also sued Jason Mitchell, his real estate brokerage firm, JMG Holding Partners LLC, which does business as The Jason Mitchell Group, and the individual real estate brokerage companies in the 41 states and the District of Columbia where it does business (The Mitchell Group), for their role in the unlawful scheme. Rocket Homes pressured real estate brokers and agents not to share valuable information with their clients about products not offered by Rocket Mortgage, such as the availability of down payment assistance programs which often save homebuyers money. The CFPB is suing Rocket Homes, The Mitchell Group, and Jason Mitchell to stop the kickback scheme, provide consumer redress, and obtain a civil penalty which will be deposited into the CFPB’s victims relief fund.

Rocket Homes Real Estate, LLC is incorporated in Michigan and is an affiliate of Rocket Companies, Inc. (NYSE: RKT), which also operates Rocket Mortgage, one of the largest mortgage lenders. Rocket Homes’ main office and principal place of business is in Detroit, Michigan. Rocket Homes operates a referral network throughout the country that matches consumers with real estate brokerages. The Jason Mitchell Group is primarily located in Scottsdale, Arizona and has 45 affiliated real estate brokerages in 41 states and the District of Columbia.

The CFPB’s investigation found that Rocket Homes gave referrals and other incentives to real estate brokerages under an agreement/understanding that the real estate brokers and agents would refer real estate settlement business to Rocket Mortgage and a separate Rocket affiliate called Amrock, which handles title, closing, and escrow services. The investigation also found that The Mitchell Group referred thousands of clients to Rocket Mortgage and Amrock. Jason Mitchell offered “Dog Bone” awards of $250 gift cards to Mitchell Group agents who made the most referrals to The Mitchell Group’s favored partners, including Rocket Mortgage and Amrock.

Specifically, the CFPB alleges that Rocket Homes violated the Real Estate Settlement Procedures Act by:

(1) Providing kickbacks in exchange for referrals: Rocket Homes gave incentives, such as home-buyer referrals and priority for future homebuyer referrals from the network, in exchange for brokers’ and agents’ mortgage lending and settlement service referrals.

(2) Requiring brokers and agents to steer consumers toward Rocket Mortgage: Rocket Homes required that the brokers and agents receiving its referrals “preserve and protect” the relationship between the consumer and Rocket Mortgage by steering clients from other competing lenders and preventing brokers and agents from sharing valuable information with their clients concerning products not offered by Rocket Mortgage, including the availability of programs that provide assistance for a borrower’s down payment; and

(3) The Mitchell Group and Jason Mitchell allegedly participated in Rocket’s illegal kickback and steering scheme. The Mitchell Group encouraged its network of real estate brokers and agents to engage in coercive tactics to get consumers to use Rocket Mortgage for their home loans. Agents were trained to suggest that house settlements could fall through if the homebuyer wanted to comparison shop with Rocket Mortgage’s competitors.

The CFPB’s lawsuit against Rocket Homes, The Mitchell Group, and Jason Mitchell seeks to stop alleged unlawful conduct, redress for harmed borrowers, and the imposition of a civil money penalty, which would be paid into the CFPB’s victims relief fund.

Read the CFPB complaint against Rocket Homes, The Mitchell Group, and Jason Mitchell.

Read the December 23, 2024 CFPB press release.

CFPB Takes Action Against Draper & Kramer Mortgage for Discriminatory Mortgage Lending Practices

 

The Consumer Financial Protection Bureau (CFPB) has alleged that Draper & Kramer Mortgage Corporation (Draper) committed discriminatory mortgage lending activities by discouraging homebuyers from applying to Draper for homes in majority-Black and Hispanic neighborhoods in the greater Chicago and Boston areas. The CFPB alleges that Draper located all its offices in majority-white neighborhoods, concentrated its marketing in majority-white neighborhoods, and avoided marketing to majority-Black and Hispanic areas. This resulted in disproportionately low numbers of mortgage loan applications and mortgage loan originations from majority-Black and Hispanic neighborhoods in Chicago and Boston compared to other lenders. If entered by the court, the proposed order would ban Draper from engaging in residential mortgage lending activities for five years, and require the lender to pay a $1.5 million civil money penalty into the CFPB's victims relief fund.

The CFPB alleges that, from 2019-2021, Draper redlined majority-Black and Hispanic neighborhoods in the greater Chicago and Boston areas, resulting in it significantly underperforming its peers in lending activity to these areas. Draper discouraged mortgage applicants from making or pursuing an application for credit on the basis of race, color, and national origin, violating the Equal Credit Opportunity Act and Regulation B.

Specifically, the CFPB alleges that Draper violated the law by:

(1) Intentionally focusing mortgage lending activities in majority-white neighborhoods and excluding Black and Hispanic neighborhoods: Draper had no offices, no loan officers, and virtually no marketing or outreach in majority- or high-Black and Hispanic neighborhoods in Chicago and Boston. Draper did not assign any loan officers to solicit applications in majority-Black and Hispanic communities and failed to train or incentivize its loan officers to lend in these communities. Draper's outreach and marketing targeted majority-white neighborhoods and largely avoided majority-Black and Hispanic neighborhoods; and 

(2) Discouraging mortgage applicants from pursuing properties in majority-Black and Hispanic neighborhoods: Draper's business model discouraged borrowers from applying for loans to purchase property in these neighborhoods. Draper's peer lenders had applications for properties in majority-Black and Hispanic areas in the Chicago metro at over two and-a-half times the rate and in the Boston metro area at three times the rate that Draper generated such applications. Draper also originated disproportionately low amounts of mortgage loans for properties in these neighborhoods, with peers in Chicago and Boston originating two and-a-half times more loans than Draper in majority-Black and Hispanic neighborhoods.

If entered by the court, the CFPB order would require Draper to: (1) Cease residential mortgage lending activities for five years: Draper cannot perform any residential mortgage lending activities, nor receive any compensation for any residential mortgage lending; and (2) Pay a $1.5 million civil penalty to the CFPB's victims relief fund.

Consumers can submit complaints about financial products and services by visiting the CFPB's website or by calling (855) 411-CFPB (2372).

Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov. To learn more about reporting potential industry misconduct, visit the CFPB's website.

Read today's proposed order.

Read the January 17, 2025 CFPB press release.

Strengthen Fair Housing in Maryland: Urge Your Senator to Support SB107!

 

In 39 states, fair housing testers use a  recording device to accurately capture the conversation with a housing provider which can later be used as evidence if the provider violates civil rights law. In Maryland, testers cannot record  conversations in the same way. 

Restricting this ability to effectively test and capture evidence of discrimination weakens enforcement of fair housing in our state. Other states are using recording to enforce the law. In New York, fair housing organizations and New York City won a $2.2 million settlement for source of income discrimination. New Jersey won a $40,000 settlement for source of income discrimination. Virginia also won a recent settlement for source of income discrimination. Maryland, despite finding cases of source of income housing discrimination, has not been able to reach a settlement because we can’t record in the same way that provides strong enough proof to lead to a settlement. 

In the current Annapolis Session, SB107 allows qualified fair housing organizations to use recording devices for testing purposes. There are several benefits to this, including:

(1) Strengthening Fair Housing Enforcement & Justice. The ability to document test experiences through audio recordings provides incontrovertible evidence of illegal housing discrimination

(2) Protecting Testers and Housing Providers. Having an exact account of a conversation protects testers from any credibility or bias as well as protects housing providers from false allegations, misunderstandings, or faulty memories of testers. 

(3) Resulting in More Efficient Allocation of Resources. Saves fair housing organizations money because they can reduce the number of testers, saving using city, county, state, and using federal funds more efficiently and effectively. The use of recorders also allows organizations to maintain the highest investigative standards. 

Urge your senator on the Judicial Proceedings Committee to vote YES on SB107.

Go to Economic Action Maryland

Justice Department Sues Six Large Landlords for Algorithmic Pricing Scheme that Over-Charged Millions of American Renters

 

The US Department of Justice (DOJ), together with its 10 state co-plaintiffs, has filed an amended complaint in its antitrust lawsuit against RealPage, to sue six of the nation’s largest landlords for participating in algorithmic pricing schemes that harmed renters. The amended complaint alleges the landlords - Greystar Real Estate Partners LLC (Greystar); Blackstone’s LivCor LLC (LivCor); Camden Property Trust (Camden); Cushman & Wakefield Inc and Pinnacle Property Management Services LLC (Cushman); Willow Bridge Property Company LLC (Willow Bridge); and Cortland Management LLC (Cortland) - participated in an unlawful scheme to decrease competition among landlords in apartment pricing, harming millions of American renters. These landlords operate over 1.3 million units in 43 states and the District of Columbia. 

The Attorneys General of Illinois and Massachusetts joined the amended complaint as co-plaintiffs, increasing the total number of State and Commonwealth co-plaintiffs to 10 (California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon, Tennessee, and Washington). DOJ simultaneously filed a proposed consent decree with Cortland that requires it to cooperate with the government, stop using its competitors’ sensitive data to set rents, and stop using the same algorithm as its competitors without a corporate monitor.

The amended complaint alleges that the six landlords participated in a scheme to set their rents using each other’s competitively sensitive information through common pricing algorithms.  Along with using RealPage’s anticompetitive pricing algorithms, these landlords coordinated through a variety of means, including:

• Directly communicating with competitors’ senior managers about rents, occupancy, and other competitively sensitive topics. For example, Greystar supplied Camden with information not only about very recent renewal rates, but also its approach to pricing for the upcoming quarter, its acceptance of RealPage’s pricing recommendations, use of concessions and competitively sensitive information about occupancy. Similarly, executives at Camden and LivCor communicated over the course of months about their pricing strategies, including plans for certain price increases.
• Regularly conducting “call arounds.” During these discussions, referred to as “market surveys,” property managers called or emailed competitors to share, and sometimes discuss, competitively sensitive information about rents, occupancy, pricing strategies, and discounts.
• Participating in “user groups” hosted by RealPage. For instance, landlords discussed via user groups how to modify the software’s pricing methodology, as well as their own pricing strategies. For example, LivCor and Willow Bridge executives participated in a user group discussion of plans for renewal increases, concessions, and acceptance rates of RealPage rent recommendations.
• Sharing information with competitors about parameters in RealPage’s software. As an example, at the request of Willow Bridge’s director of revenue management, Greystar’s director of revenue management supplied its standard auto-accept parameters for RealPage’s software, including the daily and weekly limits and the days of the week for which Greystar used “auto-accept.”

DOJ also announced a proposed consent decree that, if approved by the court, would resolve its claims against Cortland, a landlord that manages over 80,000 rental units in 13 states. Under the proposed consent decree, Cortland would cooperate in the DOJ investigation and litigation and be barred from, among other things: (1) Using competitors’ competitively sensitive data to train or run any pricing model; (2) Using third-party software or algorithms to price apartments without the supervision of a court-appointed monitor; and (3) Soliciting, disclosing, or using any competitively sensitive information with any other property manager as part of setting rental prices or generating rental pricing recommendations.

As required by the Tunney Act, the proposed consent decree, along with the competitive impact statement, will be published in the Federal Register. The 1974 Act, also known as the Antitrust Procedures and Penalties Act, requires federal courts to review certain DOJ decisions.

Any person may submit written comments concerning the proposed consent decree during a 60-day comment period to Chief, Technology and Digital Platforms Section, Antitrust Division, Department of Justice, 450 Fifth Street NW, Suite 8600, Washington, D.C. 20530. At the end of the comment period, the U.S. District Court for the Middle District of North Carolina may enter the final judgment upon finding it is in the public interest.

Proposed Final Judgment - US et al. v. RealPage Inc.pdf

Amended Complaint - U.S. et al. v. RealPage Inc..pdf

Read the January 7, 2025 DOJ press release.

US Department of Justice Corrects Legal Record on Horrific 1921 Tulsa Race Massacre

 

A new report by the US Department of Justice (DOJ) has concluded that the 1921 attack in Tulsa's Greenwood District was the result of racially motivated violence targeting Black residents, refuting an initial federal account from the time. A coordinated attack by thousands of White people led to the slaughter of hundreds of Black residents. DOJ conducted the reexamination of the case under the Emmett Till Unsolved Civil Rights Crime Act, which allows it to examine fatalities caused by civil rights crimes that occurred on or before December 31, 1979.

DOJ said a recent four-month reexamination of evidence in the case, known as the Tulsa Race Massacre, found that what an investigator described a month after the attack as spontaneous violence was, in fact, a coordinated effort by White perpetrators to decimate a thriving community known as “Black Wall Street.” The attackers, organized and aided by law enforcement, shot, beat, and arrested Black residents while burning and looting 35 city blocks over several hours on May 31, 1921, DOJ concluded. White authorities promised to help rebuild the community but instead put up barriers to financial assistance and offered no avenues for legal redress, investigators said.

The findings refute much of the initial report on the crime, in which a DOJ investigator at the time wrote that the violence was a “small” and “half-hearted” lynching attempt after a White man falsely accused a 19-year-old Black man named Dick Rowland of assaulting a White woman in an elevator.

Since then, historians have established a narrative consistent with DOJ’s new report, which is based on examining documents, witness accounts, and scholarly and historical research. The massacre “stands out as a civil rights crime unique in its magnitude, barbarity, racist hostility, and its utter annihilation of a thriving Black community,” Assistant Attorney General Kristen Clarke said. “Until this day, the Justice Department has not spoken publicly about this race massacre or officially accounted for the horrific events that transpired in Tulsa.”

Read the January 10, 2025 Washington Post article.

Read the January 10, 2025 DOJ press release.

Maryland Commission on Civil Rights Honors the Life, Leadership, and Legacy of President Jimmy Carter

 

Tuesday, December 31, 2024

Image Credit: National Park Service Dream Bigger. Fight Harder. Lead with Heart. It is with profound sadness and reverence that we acknowledge the passing of President Jimmy Carter, a towering figure whose life was a testament to the ideals of equity, justice, and human dignity. As the 39th President of the United States, he not only led with unwavering integrity but also exemplified the moral courage required to advance the causes of fairness and equality in every corner of our nation and beyond. President Carter's legacy transcends his time in office. Through his relentless advocacy for human rights, his commitment to eradicating poverty, and his ceaseless pursuit of peace, he reminded us all of the power of leadership rooted in compassion and conviction. His work with Habitat for Humanity and the Carter Center illuminated the transformative potential of service and inspired generations to believe in the possibility of a more equitable world. At the Maryland Commission on Civil Rights, we honor President Carter's enduring commitment to civil rights and social justice. His leadership taught us that progress is neither easy nor guaranteed, it is the product of courage, perseverance, and an unyielding belief in the inherent worth of every individual. His life challenges us to continue dismantling barriers, uplifting marginalized voices, and fostering inclusive communities. As we reflect on his extraordinary life, let us recommit ourselves to the values he championed. Let us strive to build a world where fairness prevails, where justice is accessible to all, and where humanity's shared potential is realized. President Jimmy Carter's legacy will forever inspire us to dream bigger, fight harder, and lead with heart. May we honor his memory not only in words but in action, as we continue the vital work of creating a more just and equitable society. Our thoughts and prayers are with the Carter family and all who were touched by his remarkable life.

Victim of Discrimination? Training & Partnerships

UPCOMING EVENTS Saturday, January 11, 2025 from 9am to 3pm: Protecting Civil Rights During Challenging Times Symposium

HOME      ABOUT MCCR      SERVICES      PUBLICATIONS      EVENTS      PRESS      CONTACT US

US Homelessness Increases 18.1% as Many Lack Affordable Housing

The U.S. had an 18.1% increase in homelessness in 2024, a dramatic rise driven mostly by a lack of affordable housing as well as devastating natural disasters and a surge of migrants in several parts of the country. The U.S. Department of Housing and Urban Development said federally required tallies taken across the country - the annual Point-In-Time (PIT) Count - in January found that over 770,000 were counted as homeless. This number misses some people and does not include those staying with friends or family because they do not have a place of their own.

The source of the data was Part 1: Point-In-Time Estimates of Homelessness of HUD's The 2024 Annual Homelessness Assessment Report (AHAR) to Congress, an annual report to Congress providing nationwide estimates of homelessness, including information about the demographic characteristics of homeless persons, service use patterns, and the capacity to house homeless persons. HUD released it on December 27, 2024.

2024's 18.1% increase comes after 2023's 12.0% increase, which HUD said was caused by soaring rents, the end of pandemic assistance, and by people experiencing homelessness for the first time. The numbers overall represent 23 of every 10,000 people in the U.S., with Black people being overrepresented among the homeless population.

Among the most serious trends was a nearly 40% rise in family homelessness - among the areas most affected by the arrival of migrants in big cities. Family homelessness more than doubled in 13 communities impacted by migrants including Denver, Chicago, and New York City, while it rose less than 8% in the other 373 communities. Almost 150,000 children were homeless on a single night in 2024, a 33% jump from last year. California, the most populous state, continued to have the nation’s largest homeless population, followed by New York, Washington, Florida and Massachusetts.

According to the National Low Income Housing Coalition (NLIHC), to fully address America’s affordable housing and homelessness crisis, "Congress must invest at the scale needed to ensure that renters with the lowest incomes have an affordable place to call home. As outlined in NLIHC’s national HoUSed campaign policy agenda, federal investments are needed to bridge the gap between incomes and housing costs through universal rental assistance, build and preserve rental homes affordable to people with the lowest incomes, prevent evictions and homelessness by stabilizing families during a crisis, and strengthen and enforce renter protections to address the power imbalance that tilts heavily in favor of landlords."

While the data presents a grim picture, it also "demonstrates that success is possible when the federal government prioritizes evidence-based solutions and funds these resources to scale," said the National Alliance to End Homelessness (NAEH). One notable example is the reduction in veteran homelessness. From 2023 to 2024, veteran homelessness dropped by 7.6%, with unsheltered veteran homelessness falling 10.7%. This marks the continuation of a successful federal strategy that has reduced veteran homelessness by over 55% since 2010, one of the most significant achievements in the fight to end homelessness. In addition, several large cities had success reducing their homeless numbers. Dallas, which overhauled its homeless system, saw a 16% drop during 2022-2024. Los Angeles, which increased housing for the homeless, had a 5% decrease in unsheltered homelessness since 2023.

Read the December 27, 2024 AP News Article.

Read the December 27, 2024 NLIHC's full statement.

Read the December 27, 2024 NAEH article.