Rocket Mortgage is challenging the Department of Housing and Urban Development's and the Department of Justice's claims that it should be held responsible for the conduct of third-party appraisers that it works with.
The megalender filed a suit against HUD in a federal court in Colorado Wednesday and is asking for allegations brought against it by the
Rocket argues the only reason it was included in the case by the government entities was to bring "headlines to their claim."
"It is unreasonable that the DOJ chose to sue Rocket Mortgage for the conduct of an independent appraiser. 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," said Bill Emerson, president of Rocket Companies, in a statement Thursday.
"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," he added.
HUD and the DOJ did not immediately respond to a request for comment.
The case was
The appraiser Maksym Mykhailyna, who owns Maverick Appraisal Group, allegedly issued a "insupportably low appraisal of a duplex owned by a Black woman in a predominantly white area of Denver," HUD said at the time. Rocket and Solidifi, the AMC, chose to rely on the appraiser's assertions despite the fact that the borrower challenged the validity of the report, according to the housing agency.
The department, after conducting an investigation, determined that there was reasonable cause to conclude the defendants violated the Fair Housing Act and forwarded the case to the DOJ, which lodged a suit against the megalender.
"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," Rocket asserts. "The borrower declined to engage in that process on two separate occasions."
Rocket is asking for a Colorado federal court to affirm that the Fair Housing Act prohibits it from influencing or attempting to influence the judgement of an appraiser. It also wants the court to confirm that it does not have any legal responsibility for the actions of an independent appraiser.
Rocket notes it originated three home loans for Francesca Cheroutes, the borrower who was allegedly discriminated against, "with which there were no issues." It added that it currently services Cheroutes' loan.
The mortgage lender outlines that Truth in Lending (TILA) mandates that a lender must obtain an appraisal from an independent state-licensed third-party appraiser to prevent conflicts of interest, yet the government is attempting to find the company liable "for not influencing or correcting the valuation."
"The accusation of discrimination is against the independent appraiser who performed the appraisal, not Rocket Mortgage," the company argues. "Despite this, the DOJ surprisingly dragged Rocket Mortgage into a lawsuit based on the assertion that the company 'had the authority to correct the [allegedly] discriminatory appraisal, or cause it to be corrected, but failed to do so.'This is 100% false."
