- The company also filed a motion to dismiss the claim the
Department of Justice brought against the company
- DOJ's recent claim against Rocket Mortgage misplaced blame
on the Company for work done by an independent appraiser hired by
an independent appraisal management company
DETROIT, Dec. 5, 2024
/PRNewswire/ -- Rocket Mortgage, the nation's largest mortgage
lender and a part of Rocket Companies (NYSE: RKT), filed suit in
Federal District Court against the United States Department of
Housing and Urban Development (HUD) to correct 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. Rocket Mortgage also
filed a motion to dismiss the claim the DOJ brought against the
company based on the same regulatory conflicts and misapplication
of applicable law.
"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 the pursuing justice against
those who may have committed wrongdoing," said Bill Emerson, President of Rocket Companies.
"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."
On October 21, 2024, the
Department of Justice (DOJ) filed a baseless complaint against
Rocket Mortgage in the United
States District Court for the District of Colorado (United
States of America v. Rocket Mortgage, Solidifi, Maksym
Mykhailyna and Maverick Appraisal Group). Rocket Mortgage followed
all applicable laws and the only explanation for the company's
inclusion in this case about the alleged conduct of an
independent appraiser is the DOJ's apparent motive to bring
headlines to their claim.
"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 accusation of discrimination is against the independent
appraiser who performed the appraisal, not Rocket Mortgage. 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.
Rocket Mortgage had no "authority to correct" the appraisal as a
matter of law and the claims against the company should be
immediately dismissed.
It's important to note that Rocket Mortgage originated three
home loans for the borrower named in the lawsuit, with which there
were no issues. The borrower's loan is currently being serviced by
Rocket Mortgage, and also was being serviced by Rocket Mortgage at
the time of the appraisal in question. 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. The borrower
declined to engage in that process on two separate occasions.
The government's own requirements under the Dodd Frank Act and
the changes to the Truth in Lending Act (TILA), that was enacted in
2010 in response to the Great Recession, mandate that a lender must
obtain an appraisal from an independent state-licensed third-party
appraiser to prevent conflicts of interest and undue influence on
the appraisal process. The government's requirements also prohibit
lenders from taking any action to influence the appraisal value "to
be based on a factor other than the independent judgment of th[at]
appraiser." The government cannot require Rocket Mortgage to rely
only on an independent appraiser's opinion of value and – at the
same time – find the company liable for not influencing or
correcting the valuation.
Rocket Mortgage filed its complaint against HUD to seek 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.
Rocket Mortgage is asking the court to:
- Declare that the Fair Housing Act prohibits Rocket Mortgage
pursuant to TILA's appraiser independence requirements from
influencing or attempting to influence the independent judgment of
an appraiser to "correct" or "remediate" a home appraisal.
- Affirm that Rocket Mortgage does not have control over, or any
other legal responsibility for, the actions of an independent
appraiser.
- State that, under the Fair Housing Act, Rocket Mortgage is not
liable for relying on an appraisal provided by an independent,
third-party appraiser
- Issue an order vacating any policies of holding mortgage
lenders responsible for failing to correct or remediate perceived
or alleged appraiser bias or discrimination in an
appraisal.
Any assertion that Rocket Mortgage is biased is false. Rocket
Mortgage remains committed to homeownership for everyone who can
sustainably afford it. In fact, the company has introduced several
programs in an effort to bridge the racial homeownership gap.
Rocket Mortgage is America's largest mortgage lender, having
helped more Americans than any other lender according to Home
Mortgage Disclosure Act (HMDA) data from 2023, the most recent time
period available. The company has also been top-ranked in J.D.
Power's client service studies for mortgage origination and
mortgage servicing a total of 22 times over the past several years,
more than any other lender.
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 also
filed a motion to dismiss the government's claims against the
company. Rocket Mortgage is represented by Michigan-based Morganroth & Morganroth and
Goodwin Procter of Washington, DC.
ABOUT ROCKET MORTGAGE
Detroit-based Rocket Mortgage
is the largest mortgage lender and is a part of Rocket Companies
(NYSE: RKT).
The lender enables the American Dream of homeownership and
financial freedom through its obsession with an industry-leading,
digital-driven client experience. In late 2015, it introduced the
first fully digital, completely online mortgage experience. Since
its founding in 1985, Rocket Mortgage has closed more than
$1.8 trillion of mortgage volume
across all 50 states.
J.D. Power has ranked Rocket Mortgage #1 in client satisfaction
for both primary mortgage origination and servicing 22 times – the
most of any mortgage lender. Rocket Companies, Rocket Mortgage's
parent company, has placed in the top third of Fortune's list of
the "100 Best Companies to Work For" the list for 21 consecutive
years.
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SOURCE Rocket Mortgage