Detroit-headquartered Rocket Mortgage, a part of Rocket Companies (NYSE: RKT), announced that is suing the US Department of Housing and Urban Development (HUD) to correct what is claimed to be “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.”
The company filed a motion to dismiss a claim brought by the US Department of Justice (DOJ) in October for a case where a Black homeowner was the victim of discrimination in the appraisal process that undervalued her home based on her race. Rocket Mortgage was accused by the DOJ of retaliating against the homeowner by cancelling her mortgage refinance application when she reported this discrimination, but the company is stating it was grouped into the lawsuit alongside Solidifi, Maksym Mykhailyna and Maverick Appraisal Group “to bring headlines to their claim.”
The company cited government requirements under the Dodd-Frank Act and the Truth in Lending Act regarding lender independence from the appraisal process. In a statement, Rocket Mortgage argued it was seeking “judicial resolution of the conflicts HUD has created between the government-created mandates of appraiser oversight and appraiser independence. This resolution is necessary because HUD has failed to provide notice or an opportunity to comment on its policy change requiring lenders to oversee and “correct” the appraisals of independent, third-party appraisers.”
The company is asking the court to affirm that it has no control over or other legal responsibility for the actions of an independent appraiser. The company added that it was not liable under the Fair Housing Act for relying on an appraisal provided by an independent, third-party appraiser. The company is also seeing an order vacating any policies of holding mortgage lenders responsible for perceived or alleged discrimination in the appraisal process.
“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.”
“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 case is Rocket Mortgage, LLC vs United States Department of Housing and Urban Development filed in the United States District Court for District of Colorado. Rocket Mortgage is represented by Michigan-based Morganroth & Morganroth and Goodwin Procter of Washington, DC.
Too bad Bill Emerson wasn’t NAR president when everything hit the fan. The outcome would have been very different. Nice to see him defend his business.
Agree completely
NAR does not add anything positive for the 1.5 million that pay millions in”DUES” to NAR.
I agree. This happened to me with a loan. It was a middle eastern woman underappraised on an equity line. We had to v wait 6 months for a new third party appraisal to ensure we were not appraisal shopping. The lady v wzs brave enough to allow me to order another appraisal after Rocket abided by the law. The next independent appraiser was right where the first ones should have appraised. I will never forget this loan in Florida. Rocket Pro v played by the book
I hope more lenders, appraisers and even NAR get on board. When appraisals had to go thru a third party that relieved lenders of any responsibility of choosing or ‘colluding’ with appraisers so why should a lender be held accountable. Sounds like another deep pocket scam for a bunch of lawyers.
Same o same o the lender leans on the management company that leans on the appraiser.
EXACTLY! The argument by Rocket makes total sense.
Rocket mortgage owns the 3rd party appraisal management company, Amrock, that provides and approves the staff and independent appraisers for rocket mortgage loans. Rocket mortgage charges borrowers appraisal fees of which Amrock takes the lions share and the rest is given to the actual appraiser. How is this not collusion. This is not disclosed or broken down on the buyers settlement statement but lumped into “Appraiser fee”. This needs to stop and borrowers need more fee transparancy
Wow, Kristina, thanks for this important background info!
Kristina, I am not fond of Rocket and their ownership of Amrock. That could definitely be a conflict of interest and it’s important to be aware of these relationships.
In this case, Solidifi is the appraisal company and not related to Amrock or Rocket from my understanding. Can you elaborate on how you see the relationship for this particular scenario? I’d like to see what I am missing.
Thank you! ☮️
Wow, surprising. HUD leadership consists of a disproportionately large group of Black Women and they “discovered” discrimination against a Black Woman. Also, can’t even keep their own rules straight. DEI at its finest. I hope Trump fixes HUD and its’s glaring, obvious, incompetent DEI hiring in-lieu of merit.
First off, the definition of an appraisal is one person’s opinion of value redered for a fee. If you have three appraisals and they are within 5% of each other you can assume they are accurate. Refinance appraisals are more difficult because you do not have the same frame of reference as a purchase where you can see the asking price and know the offer price. A second appraisal should be an option for the consumer. Why is this a lawsuit from the DOJ other than you have politicians and government employees who are blinded by their preconceptions and can’t think logically. This is the latest in a long line of head scraters from the DOJ. Rocket Mortgage, welcome to our world.
Such a deplorable practice by HUD [or by extension VA, FNMA, GNMA, FHLIC, et al] of holding any lender responsible for independent 3rd party appraisers must be challenged and overturned permanently. Verifying an appraiser’s compliance with USPAP, etc. must always be kept independent from lending institutions’ separate regulations & oversight. The systematic procedure for lender “valuation challenges” is already provided for and its quite difficult to change any appraisal, accordingly. If lenders challenge appraisals too frequently, it may result in penalties or sanctions against them, not the appraisers being complained of.
I use to say “Our Goverment” but now I stopped saying that , So I will say ” The Goverment” is so out of control that no matter what you do even if you follow the rules they made you can get still get sued for what ever reason they come up with.
If you have any value or any thing of value ,they will go after you for it, but if you have nothing that they can take from you they will not bother you, even if you are in the country illegally.
I agree with the above statements. In my opinion, the governments structuring of this legal complaint, i.e., adding Rocket Mortgage because of their deep pockets, justifies the formation of DOGE.
The lawsuit should include the AMC (Appraisal Management Company) too. They charge a lot of money over and above what an appraiser makes for the job and enforce numerous standards determined by the Lender Company. There are a lot of hands inserted into the completion of one of these Appraisal reports. The DOJ has already shown REALTORS they can’t be trusted. Making an agreement, enticing a HUGE settlement in the Sitzer-Burnett case then reopening the case is a pitiful injustice.
I’m a retired realtor who worked in the industry for 15 years and recently refinanced my mortgage with Rocket and found nothing nefarious with the way they handled it. Same old story how the government leans on companies with deep pockets.
So you’re a black man that refinanced his mortgage with Rocket Mortgage
Please stop commenting on things you have no first hand knowledge of experiencing
It is one thing for Rocket to file this lawsuit, but it was another thing to cancel her application. If you truly believe you have nothing to do what that third party appraisal company did than why not just hire another appraiser. As a matter of fact you can have them pull comps of similar properties that have sold recently and are currently on sale. Color has nothing to do with it. Rocket lost standing when they proceeded to treat that customer the way they did. Now they get to explain to the court why they did it