DOJ Takes Legal Action Against Rocket and Appraisal Companies for Discrimination! What You Need to Know!

Facing allegations of discrimination in property appraisals, Rocket Mortgage is under fire from regulators for allegedly undervaluing a Black homeowner’s property in Colorado. Despite defending its practices as unbiased, the Detroit-based lender is now entangled in a legal battle against the U.S. Department of Justice, an appraiser, and an appraisal management company.

1. The Alleged Discrimination:
   • Rocket Mortgage is accused of undervaluing a homeowner’s property in Denver based on her race during an appraisal in 2021.
   • Additionally, the lender is charged with retaliating against the homeowner by canceling her refinance application following her complaint of discrimination.

Rocket Mortgage has emphasized the requirement for mortgage lenders to maintain independence during the appraisal process. By partnering with independent appraisal management companies and licensed appraisers, the goal is to ensure an impartial assessment of a property’s value.

1. Responding to the Lawsuit:
   • Rocket Mortgage has vocalized its belief that the government’s accusations constitute a significant overreach with the intention of garnering attention through the lender’s prominent industry positioning.
   • The lawsuit filed by the U.S. Department of Justice in Colorado aims to combat appraisal bias that hinders communities of color from accessing credit and benefiting from homeownership.

Assistant Attorney General Kristen Clarke highlights the importance of addressing appraisal bias to promote equal access to housing opportunities for individuals of all backgrounds.

1. Past Precedents:
   • Mentioned in the article is a past case involving a top-ranked lender, loanDepot, and allegations of discrimination in property appraisals.
   • While the lender did not admit fault, a settlement was reached that included an overhaul of appraisal policies and procedures to prevent discrimination in the future.

In conclusion, the issue of appraisal bias in property valuations poses a significant barrier to equal homeownership opportunities for marginalized communities. It is essential for lenders to uphold fair and unbiased appraisal practices that ensure equitable access to credit and housing for all individuals, regardless of race or background.