National mortgage lender Rocket Mortgage, a part of Rocket Companies, filed suit in Federal District Court Dec. 5 against the U.S. Department of Housing and Urban Development (HUD) to correct conflicts between the government’s regulations requiring appraiser independence and its enforcement actions seeking to hold lenders liable for the conduct of independent licensed appraisers. Rocket Mortgage also filed a motion to dismiss the claim the DOJ brought against the company based on the same regulatory conflicts and misapplication of applicable law.
“It is unreasonable that the DOJ chose to sue Rocket Mortgage for the conduct of an independent appraiser,” said Bill Emerson, president of Rocket Companies, in a release. “We will not stand idly by while the courts are used as venues to leverage our company’s name to publicize the case instead of pursuing justice against those who may have committed wrongdoing.
“Today’s filings highlight the conflict between HUD’s regulations and the DOJ’s enforcement positions. We are looking forward to laying out all the facts of this case in court. Rocket Mortgage has thousands of passionate team members who focus every day on doing the right thing. It would be an offense to our workforce if we let the DOJ’s and HUD’s wrongful actions go unchecked.”
On Oct. 21, 2024, the DOJ filed a complaint against Rocket Mortgage in the U.S. District Court for the District of Colorado (United States of America v. Rocket Mortgage, Solidifi, Maksym Mykhailyna and Maverick Appraisal Group). Rocket Mortgage said it followed all applicable laws and the only explanation for the company’s inclusion in this case about the alleged conduct of an independent appraiser is the DOJ’s apparent motive to bring headlines to their claim.
“It is notable that, in a case about the alleged actions of an independent appraiser that was contracted through an unaffiliated third party, Rocket Mortgage is listed first in the DOJ’s filing and is the only company mentioned by name in the headline of the government’s press release announcing the DOJ’s lawsuit,” Emerson added. “We have always been guided by the fundamental principle that all homebuyers and homeowners should be treated fairly and should have every opportunity to achieve their dream of owning their own home or using their equity to improve their lives. Our long, exemplary track record of fair housing lending speaks for itself.”
The accusation of discrimination is against the independent appraiser who performed the appraisal, not Rocket Mortgage, the company said. Despite this, Rocket alleges, the DOJ dragged Rocket Mortgage into a lawsuit based on the assertion that the company “had the authority to correct the discriminatory appraisal, or cause it to be corrected, but failed to do so.” This is 100% false, the company claims. Rocket Mortgage had no “authority to correct” the appraisal as a matter of law and the claims against the company should be immediately dismissed.
It’s important to note, the company said, that Rocket Mortgage originated three home loans for the borrower named in the lawsuit, with which there were no issues. The borrower’s loan is currently being serviced by Rocket Mortgage, and also was being serviced by Rocket Mortgage at the time of the appraisal in question. When the applicant expressed concern with the home’s valuation during this refinance, Rocket Mortgage offered a path to challenge the appraisal through a value reconsideration process which complies with the law, The borrower declined to engage in that process on two separate occasions.
Rocket Mortgage is asking the court to:
- Declare that the Fair Housing Act prohibits Rocket Mortgage pursuant to TILA’s appraiser independence requirements from influencing or attempting to influence the independent judgment of an appraiser to “correct” or “remediate” a home appraisal.
- Affirm that Rocket Mortgage does not have control over, or any other legal responsibility for, the actions of an independent appraiser.
- State that, under the Fair Housing Act, Rocket Mortgage is not liable for relying on an appraisal provided by an independent, third-party appraiser
- Issue an order vacating any policies of holding mortgage lenders responsible for failing to correct or remediate perceived or alleged appraiser bias or discrimination in an appraisal.
