Rocket is being sued for allegedly directing clients to its mortgage business and away from cheaper loan options.

Three plaintiffs filed the suit Monday in the U.S. District Court for the Eastern District of Michigan. They accused Rocket of exploiting the "vulnerability of homebuyers for profit," by steering prospective borrowers to use their financing, Rocket Mortgage, even though its terms were "disadvantageous to the clients."

 "We categorically disagree and will dispute the allegations that Rocket, Redfin or any of the named defendants are doing anything illegal," a Rocket spokesperson said Tuesday. "The claims in this case are a complete retread of the case that the [Consumer Financial Protection Bureau] filed and was quickly dismissed. Rocket is proud to help homebuyers navigate complex real estate partnerships. We are confident that we will be vindicated once facts are presented"

Steering in real estate involves any illegal influence on a client's decision diverting them away from cheaper loans, said attorneys at Hagens Berman, who represent the plaintiffs, in a press release Monday. Zillow is facing multiple similar suits, with the most recent filed two weeks ago.

How plaintiffs say the system operated

The lawsuit alleges Rocket created a vertical system designed to maintain control over homebuyers. Rocket provided customer leads to real estate agents, who, in turn, steered clients to Rocket Mortgage, regardless of the cost-saving opportunities other lenders provided, which is in violation of a real estate agent's fiduciary duties, the filing said.

Until its acquisition of Redfin, Rocket Homes ran a referral network through its website, which connected prospective homebuyers with real estate agents. Agents were required to pay a 35% fee to Rocket Homes and steer clients to Rocket Mortgage, according to the lawsuit.

Agents who suggested other lenders or helped clients find better rates elsewhere were reprimanded, threatened with termination from the referral network or given fewer leads, the lawsuit alleged.

"Everyday families rely on the laws governing our nation's real estate market for fairness and transparency, and we believe Rocket has failed to play by the rules," Berman said. "We believe at least hundreds of thousands of consumers have been duped by Rocket's tricks, and judging by its year-over-year revenue, its scheme has worked."

Rocket posted $1.78 billion in revenue in the third quarter, up 148% year over year. "By all of these measures, its steering program has been a resounding success," the lawsuit said.

The filing claims the lender violated the Real Estate Settlement Procedures Act and seeks treble damages, single damages, disgorgement and injunctive relief to end Rocket's alleged steering practices.