Rocket Companies sues U.S. Department of Housing and Urban Development

Rocket Companies (RKT)’ Rocket Mortgage filed suit in Federal District Court against the U.S. 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. On October 21, the DOJ filed a complaint against Rocket Mortgage in the District of Colorado. The accusation of discrimination is against the independent appraiser who performed the appraisal, not Rocket Mortgage. 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. 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 and isue 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.