Rocket Mortgage has sued the U.S. Department of Housing and Urban Development (HUD) over what it claims is an “incorrect application of the law” in a case involving appraisal bias.
Specifically, Detroit-based Rocket is seeking the dismissal of a Department of Justice (DOJ) lawsuit filed against it in October. The DOJ suit alleges that the lender discriminated against a Black Denver homeowner by accepting an appraisal that undervalued her home based on race. That suit involved a refinance application from 2021; to complete the appraisal, Rocket contracted with Solidifi U.S. Inc., which then retained appraiser Maksim Mykhailyna to appraise the property.
Solidifi and Mykhailyna are also named in the DOJ’s suit. At the time, HUD applauded the DOJ’s actions, with Diane M. Shelley, principal deputy assistant secretary of HUD’s Office of Fair Housing and Equal Opportunity, saying that it was “committed to working with DOJ to ensure appraisal companies and mortgage providers are held accountable when they violate our nation’s fair housing laws.”
But according to Rocket, the federal suit it filed against HUD in a U.S. District Court in Colorado raises and challenges inconsistencies between regulations that keep appraisers’ actions independent from the lenders that contract with them, but also hold lenders accountable for the results of those appraisals.
Rocket’s filing pointed out that it, along with other mortgage companies, was previously taken to court because of “what the government perceived to be intrusions on appraiser independence.”
“There are no allegations that Rocket Mortgage hired Mykhailyna or ever met him — it did neither,” Rocket’s suit read. “Nor are there any allegations that Rocket Mortgage directed or participated in any of Mykhailyna’s conduct.”
“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. “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 the 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.”
