Real Estate and Market Trends

Lender Rocket Homes gave kickbacks to real estate brokers and agents to get homebuyers to sign up for its loans, the Consumer Financial Protection Bureau alleged in a lawsuit on Monday.

The lawsuit aims to stop the alleged kickback scheme, which gave refferals and other incentives to pressure "real estate brokers and agents not to share valuable information with their clients concerning products not offered by Rocket Mortgage, such as the availability of down payment assistance programs, which often save homebuyers thousands of dollars," the CFPB said.

“Rocket engaged in a kickback scheme that discouraged homebuyers from comparison shopping and getting the best deal,” CFPB Director Rohit Chopra said. “At a time when homeownership feels out of reach for so many, companies should not illegally block competition in ways that drive up the cost of housing.”

Additionally, the CFPB sued The Jason Mitchell Group, a real estate firm doing business in 41 states and the District of Columbia, for participating in the kickback scheme and referring thousands of homebuyers to Rocket Homes and an affiliate.

For example, the CFPB said The Jason Mitchell Group gave $250 gift cards to agents that made the most referrals to its favored partners: Rocket Mortgage and Amrock, a Rocket Homes-affiliate that handles title, closing and escrow services.

A spokesperson for Rocket Homes told ConsumerAffairs that the "allegations are false and a distortion of reality."

"The facts are clear – data shows one third of consumers with a loan application already in progress with Rocket Mortgage, before contacting Rocket Homes, chose to close with a different lender," the spokesperson said. "This proves Rocket Homes is committed to empowering homebuyers to make the best decisions for their unique needs. Rocket Homes has always focused on connecting buyers with top-performing agents based on measurable success metrics."

The Jason Mitchell Group didn't immediately respond to ConsumerAffairs's request for comment.

Power outages are a big problem in some of America's largest cities.

One in four households had a power outage within the 12 months before they were interviewed between May and September in 2023 by the federal government's American Housing Survey, which surveys the nation every two years.

And 70% of those households said the outage lasted 6 or more hours.

Homeowners experienced power outages more than renters: Around 28% of homeowners had an outage compared to 20% of renters.

Outages were also more common in rural areas, with around 35% of households reporting an outage in rual areas versus 23% in urban areas.

Still, among the 20 of the nation's biggest metros surveyed, an average of more than one in four of households reported a power outage.

The worst city for power outages was Cincinnati (46%), followed by Detroit (45%) and Cleveland (44%).

On the other hand, the best city for power outages was Miami (6%), followed by New York (11%) and Chicago (15%).

The ranking suggests that cities with more outages have poorer or aging grid infrastructure.

For instance, the second-worst city Detroit is in the state of Michigan which has one of the least reliable power grids.

But severe weather and electrical overloads during high heat are also big reasons some cities have it worse.

And Americans say the outages can cause mild to serious problems.

The most common difficulty households reported from outages was food spoiling (5%), having to stay somewhere overnight (3%) and missing work (2%).

But less than 1% of households reported that pipes froze, medicine spoiled or water collected in their basement or crawl space.

The outages also present unique difficulties for people with disabilities and their caregivers: Around 28% of households with at least one disabled person living there reported a power outage. 

Millions of American don't have homeowners insurance, exposing them to natural disasters and challenging their ability to build wealth.

One in thirteen, or 7.4%, of U.S. houses lacked homeowners insurance in 2021, according to an analysis by nonprofit Consumer Federation of America of the U.S. Census's most recent American Housing Survey.

That is the equivalent of around 6.1 million homes and at least $1.6 trillion of uninsured property under conservative estimates, CFA said.

“Not only are uninsured families unprotected, but the economic fabric of entire communities is also at risk if significant portions of residents cannot rebuild after a disaster," said Douglas Heller, CFA’s director of insurance.

Foregoing homeowners insurance is often called "going bare," which comes at a time when Americans are struggling to pay steep premiums and get insurance in some states, such as California and Florida, that some insurers are pulling out of.

It is possible even more homeowners are uninsured today after insurance costs have gone up in recent years and living comfortably has grown more expensive due to inflation, but CFA said research into homeowners insurance remains in its infancy because of poor data.

Where Americans don't have homeowners insurance

The disparity in homeowners insurance is on display among 15 of America's biggest cities.

In 2021, the five cities with the highest percentage of uninsured homes were Miami (14.5%), Houston (9.8%), Detroit (9.3%), Riverside (6.3%) and Phoenix (5.8%).

The five cities with the lowest percentage of uninsured homes were Chicago (2.4%), Boston (2.5%), Washington D.C. (3.3%), New York City (3.4%) and Seattle (3.5%).

The percentage of homes with insurance varies considerably by city and state, in large part because of household income, frequency of natural disasters and availability of competitively-priced insurance.

The five states with the highest percentage of uninsured homes were Mississippi (13.5%), New Mexico (13.1%), Louisiana (11.9%), West Virginia (11.3%) and Alaska (11.2%).

The five states with the lowest percentage of uninsured homes were Utah (4.4%), Oregon (4.9%), Maryland (5.1%), New Hampshire (5.1%) and Massachusetts (5.2%).

How can homeowners insurance coverage be improved?

CFA has recommendations for what should be done to address the issue of homeowners insurance:

• More investment: Governments need to grow investments in protecting communities and homes from natural disasters, which could lower what insurers charge.
• More data: Regulators need to collect more specific and timely information on homeowners insurance to understand where the problems are.
• Racial gaps: Homeowners of color are reportedly being denied insurance because of their ethnicity and more research needs to be done under existing Fair Housing Laws to hold insurers accountable.

Tips for lowering homeowner insurance premiums

The Insurance Information Institute has suggestions to lower your homeower insurance bill:

• Shop around: Compare multiple insurers, contact your state insurance department, check consumer guides, speak with insurance agents and use online comparison services to get a good price.
• Raise deductible: Increasing your homeowner insurance deductible, or what you pay towards a loss, from typically $500 to $1,000 can lower the amount you pay in monthly premiums.
• Bundle insurance: Buying both your car and home insurance from the same provider can get you a discount.
• Stay with insurer: Keeping the same insurer for several years can get you a discount as a long-term policyholder.
• Improve disaster resilience: You may be able to save on premiums by adding home upgrades such as storm shutters, reinforcing your roof and buying stronger materials.
• Improve security: Installing burglar alarms, dead-bolt locks, smoke detectors and fire sprinklers can lower your monthly homeowners insurance premiums.