Rocket Mortgage Says Broker Faked Borrower Records on Two Loans

A wholesale agreement followed, and it put the broker on the hook for the accuracy of every loan package it sent over. The contract language is blunt: the broker warranted it would not submit applications “containing false or misrepresented information” and took responsibility for “all actions taken in the course of its performance” – whether carried out by the brokerage, its staff, the borrowers, or any third party it brought in.

Then the loans closed. Investors flagged problems. And what Rocket Mortgage says it found was that the broker had submitted applications that “misrepresented the borrowers’ income, assets and employment status,” backed by documents the filing calls “misleading, untrue, fabricated, altered and otherwise fraudulent.” The suit points to employment records, earnings documentation, and asset information specifically.

From there, the allegations get personal. The filing says the two individual defendants acted “knowingly, willfully, and/or with specific and malicious intent to defraud Rocket Mortgage and induce it to fund the Loans.” Both face fraud claims in their own names – not just through the brokerage.

Rocket Mortgage says it put the broker on notice, demanding it buy back the loans and cover the lender’s losses under the agreement’s make-whole provisions. The broker’s response, according to the filing: nothing. It “willfully failed and/or refused to honor the terms of the Agreement.”

So now it is in court. Four counts in total. Two go after the brokerage – one for breach of contract, and one for refusing to make good on the agreement’s promise to cover Rocket Mortgage’s losses. The other two are fraud claims. One alleges the brokerage made false representations to get into Rocket Mortgage’s wholesale program in the first place. The second alleges the two individuals personally took part in submitting the fraudulent loan-level documentation.