The real estate brokerage industry escaped a seismic blow on Feb. 27, 2025, when the Consumer Financial Protection Bureau (CFPB) dismissed its baseless lawsuit against the Jason Mitchell Group (JMG) and Rocket Homes with prejudice. Jason Mitchell’s three-year stand was a rare victory against an agency with no reins on its abusive tactics, but the cracks it exposed — and the myths it left behind — demand our attention.
The stakes were seismic
Had the CFPB forced JMG into submission under Rohit Chopra’s 2024 salvo, broker-to-broker commissions — protected by RESPA’s Section 8(c)(2), a congressional shield for agent fee splits — would’ve been illegal. Referral models like KW Referral Network, Zillow’s Premier Agent network, Leading Real Estate Companies of the World, HomeLight, Anywhere Leads Network, Worldwide ERC, and thousands of local firms would’ve been gutted.
Lenders or loan officers passing deals to agents for standout service? Outlawed under a warped RESPA reading. Zillow’s billions in transactions and relocation ecosystems? Shattered. An industry still reeling from 2024’s commission shifts would’ve faced spiking costs and shrinking options, with consumers left holding the bag while real bad actors slipped free.
A pattern of targeting the small to topple the big
This wasn’t random — it’s a calculated playbook. The CFPB hits small players because they can’t fight back, setting a precedent to tackle giants who’d crush them head-on later. Wells Fargo’s David Eghbali got smeared with shaky claims. Townstone’s Barry Sturner faced allegations of discrimination after 23 years — zero consumer complaints, no hard data — just a CFPB fishing expedition. No Notice and Opportunity to Respond and Advise “NORA” process — it was denied; no due process; during a seven-hour Meet & Confer, they denied him a bathroom break, then had an enforcement attorney escort and watch him — a blatant intimidation flex.
Courts questioned the CFPB’s reach, but Sturner recently settled for $105,000 against a take it or leave it non-negotiable $2.3 million offer or face a $45 million litigation threat, financially broken despite the moral win. It’s regulation by ruin, ignoring evidence to force politically driven change, turning consumer protection into a blunt weapon.
The JMG sham: Mitchell’s grit fooled the public
The CFPB’s case against JMG, launched in December 2024, was a sham from the start. Jason Mitchell — a Scottsdale broker who built JMG into a powerhouse — faced a three-year onslaught that tested every ounce of his resolve and nearly broke him. They branded $250 gift cards — legal commission boosts he gave his own agents for converting leads into closed deals — as Rocket Mortgage kickbacks.
The public still buys the lie that Mitchell was steering clients to Rocket in a shady scheme, but that’s flat-out wrong — no evidence, no truth. It was an internal incentive, legal in all 50 states, not a quid pro quo. The CFPB’s petition, laced with distorted claims, aimed to bankrupt him and coerce false testimony against Rocket Homes, a bigger target they couldn’t hit directly. Mitchell called it a “witch hunt” — spot on. New Trump-era leadership saw through the farce and killed it, but the CFPB’s smear stuck in the public’s mind, a lingering scar from their reckless spin on a guy who wouldn’t break.
NAR and trade groups: Deafening silence
Mitchell shouldn’t have fought alone. NAR, with 1.4 million Realtors, offered no public support as the CFPB tried to dismantle a cornerstone of their livelihoods — unlike its fierce $418 million commission settlement defense. Other trade associations failed to engage the accused — like Townstone or JMG — to vet the CFPB’s accusations. Had they stepped in early, Sturner might’ve won outright, not just limped through a pyrrhic battle. This wasn’t a side issue; it was existential. The industry can’t lean on lone warriors.
Reform or bust: Protecting consumers and the industry
The CFPB’s retreat spares real estate, lending, and title insurance — for now — but its smear tactics chill innovation and punish small brokerages and vast referral networks daring to thrive. Exceptional staffers get tarnished by rogue policymakers who’ve hijacked a vital mission, leaving the public and their own betrayed.
Reform is non-negotiable: swap the single-director fiefdom for a bipartisan board — consumer advocates and industry veterans from both aisles — to weigh actions with real insight. Make the NORA process mandatory — to give targets a fair shot to respond before the hammer drops, instead of a non-negotiable settlement amount, or we will file a highly inflammatory public complaint against you.
If resources are thin, then send former HUD RESPA-styled “Love Letters” — warning notices — to nudge fixes without wasteful crusades. Add pre-suit evidence reviews and penalties for baseless claims. Bad actors thrive while this squanders trust — Mitchell’s David vs. Goliath win isn’t a miracle we can count on. Trade associations — NAR included — must vet, rally, and lead, not watch when the axe swings. The CFPB’s hunger lingers; reform it, refocus it — or lose its purpose and ours.
The next time you see Jason Mitchell or Barry Sturner, tell them thanks for sticking up for you. But how can they and others get their reputations back? Have the CFPB apologize and reimburse them.
For more information regarding the CFPB’s case with Jason Mitchell, click HERE.
Marx Sterbcow is the managing attorney at Sterbcow Law Group LLC. While the author has knowledge and participated in the case, they were not the attorney of record in the matter. Mr. Sterbcow was, however, the attorney of record on the Townstone case.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the editor responsible for this piece: zeb@hwmedia.com.
