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Justice Department sues Rocket Mortgage over alleged racial discrimination

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Thursday, November 21, 2024

Justice Department sues Rocket Mortgage over alleged racial discrimination

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Lisa O. Monaco Deputy Attorney General | Official Website

The Justice Department has initiated legal action against Rocket Mortgage LLC, Solidifi US Inc., Maverick Appraisal Group Inc., and Maksym Mykhailyna. The lawsuit alleges that these entities discriminated against a Black homeowner by undervaluing her home based on race during an appraisal required for a mortgage refinance application. Additionally, the complaint claims that Rocket Mortgage retaliated by canceling the homeowner's refinance application after she reported the alleged discrimination.

Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division stated, “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.” She emphasized that appraisal bias contributes to the racial wealth gap and contradicts principles of fairness in the housing market.

Acting U.S. Attorney Matt Kirsch for the District of Colorado remarked, “The complaint alleges racially discriminatory practices by a lender and an appraiser that harmed a homeowner. These discriminatory practices have gone on for too long in Denver.” He reiterated the commitment of the U.S. Attorney’s Office to address inequities in housing through enforcement of federal anti-discrimination laws.

According to the complaint, a homeowner applied for a mortgage refinance loan with Rocket Mortgage in January 2021. Rocket Mortgage engaged Solidifi US Inc. to conduct a home appraisal, which was subcontracted to Mykhailyna and his company, Maverick Appraisal Group. The complaint alleges Mykhailyna used sales data from neighborhoods with larger Black populations rather than nearby predominantly white neighborhoods when appraising the property, resulting in an undervaluation by over $200,000 compared to an earlier appraisal.

Upon receiving this appraisal, the homeowner contacted Rocket Mortgage citing perceived discrimination. In response, Rocket Mortgage canceled her application. The homeowner subsequently filed a complaint with HUD, which investigated and found reasonable cause for Fair Housing Act violations before referring it to the Justice Department.

Principal Deputy Assistant Secretary Diane M. Shelley of HUD’s Office of Fair Housing and Equal Opportunity commented on the case: “HUD applauds today’s action and remains committed to working with DOJ to ensure appraisal companies and mortgage providers are held accountable when they violate our nation’s fair housing laws.”

For more information about civil rights laws enforced by the Justice Department or how individuals can report housing discrimination, visit www.justice.gov/crt or pave.hud.gov.

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