The U.S. Department of Justice has initiated legal action against Rocket Mortgage, Solidifi U.S. Inc., Maverick Appraisal Group Inc., and its CEO Maksym Mykhailyna, alleging racial discrimination during a home appraisal for a Black homeowner in Denver, Colorado. CBS News Detroit reports that the lawsuit, filed in the U.S. District Court for the District of Colorado, claims that the homeowner's residence was appraised at a value $220,000 lower than a previous valuation and alleges the use of comparables from predominantly Black neighborhoods instead of those akin to her predominantly white locality.
According to the report by KDVR, the homeowner in the Hale neighborhood of Denver suffered an appraisal that didn't seem to reflect the actual rising property values, despite home prices surging 25% in the area. The complaint elaborates that the defendants intentionally chose sales from further away neighborhoods for comparison, deliberately avoiding those closer to the property's actual locale. After trying to challenge the undervaluation, Rocket Mortgage proceeded to, rather than correct the possible injustice, simply cancel the homeowner's refinance application.
The accusation surfaces amidst continuing concerns over systemic discrimination in housing and financial services. As housingwire notes in its account, "This lawsuit is part of our ongoing efforts to bring an end to appraisal bias which prevent Black communities and other consumers of color from accessing credit and benefitting from homeownership," as stated by Assistant Attorney General Kristen Clarke of the DOJ's civil rights division.
Rocket Mortgage has contested the allegations, maintaining that the appraisal process is conducted at arm's length, in compliance with federal mandates to ensure unbiased valuations. "It is clear the government isn't interested in their own rules, or facts, and are simply including us in this case to score headlines based on our strong brand and prominent position in the industry. We look forward to exposing the government's massive overreach in this matter," a spokesperson for Rocket Mortgage told housingwire. This standoff bears shades of a recent case with loanDepot, which, while admitting no fault, agreed to implement changes post-settlement, as reported by housingwire.
The Department of Housing and Urban Development's (HUD) response underscored the unacceptable reality of discriminatory practices persisting well over half a century since the enactment of the Fair Housing Act. "It has been over 56 years since the passage of the Fair Housing Act, and it is unconscionable that Black and Brown families still face discrimination during housing transactions," Principal Deputy Assistant Secretary Diane M. Shelley conveyed in a release from the U.S. Attorney’s Office, as CBS News Detroit cites. HUD has expressed its continued commitment to addressing violations of the nation's fair housing laws in conjunction with the DOJ's actions.
