Another administrator sued Rocket Mortgage for allegedly discriminating against a Black homeowner by disparaging his home during an inspection in Colorado three years ago. And the Detroit-based lender believes it’s “egregious abuse.”
On Monday, i US Department of Justice– following a step taken by US Department of Housing and Urban Development (HUD) in July—filed a lawsuit against the lender, auditor Maksim Mykhailyna and his company, Maverick Appraisal Groupand a test management company Solidifi US Inc..
The document says the plaintiffs downgraded a homeowner’s property based on his race in a 2021 assessment in Denver. In addition, Rocket is accused of retaliating against the homeowner for withdrawing his request for a refund when he reported the discrimination.
“Under federal law, mortgage lenders must work longer hours during the appraisal process, working with private appraisal companies that outsource the work to state-licensed appraisers,” a Rocket spokesperson told HousingWire. “The purpose of the law is to determine the value of the house without input or bias from lenders or any other party interested in the transaction.”
The spokesperson continued: “It is clear that the government does not care about its laws, or the facts, and is simply putting us in this case to get headlines based on our strong brand and prominent position in the industry. We look forward to exposing the government’s massive hacking in this matter.”
The DOJ’s lawsuit was filed in the US District Court for the District of Colorado.
“This case is part of our ongoing efforts to end discrimination that prevents black communities and other consumers of color from obtaining credit and benefiting from homeownership,” said Assistant Attorney General Kristen Clarke of the DOJ’s Civil Rights Division, in a statement. .
The homeowner applied for a mortgage refinance at Rocket in January 2021.
According to the complaint, during the inspection, Mykhailyna used the sale of properties in remote areas with a large Black population and the sale of abandoned houses less than a kilometer from the home owner’s property.
It resulted in an appraisal more than $200,000 lower than one made in the same area less than a year ago, despite home prices rising 25% in Denver over the same period. After complaining to Rocket Mortgage, the company canceled his request for a refund.
The homeowner filed a complaint with HUD, which concluded that the defendants violated the Fair Housing Act, and referred the matter to the DOJ.
This is the second appraisal bias case involving a top 10 lender and a powerful regulator. loanDepot in March settled a civil lawsuit in which a Black Maryland couple claimed they failed a home inspector’s inspection and were subsequently discriminated against by the lender. The DOJ and the CFPB filed a statement of interest in the case.
loanDepot eventually admitted the mistake and the settlement consisted of an overhaul of its appraisal policies and procedures.
The changes include communicating to applicants that they have the right to request a reconsideration of value (ROV); explain why the ROV was rejected or the measurement was not changed; and training its credit, valuation and customer staff on the topic. The document states that loanDepot “must not use appraisers who have been found to be biased in an appraisal conducted by a court of law.”
Related
Source link
