Rocket Hit With DOJ Lawsuit Over Appraisal Discrimination

Rocket Mortgage is once again facing a discrimination lawsuit dealing with the wrongful appraisal of a Black woman’s home three years ago, this time from the Justice Department.

The DOJ has filed a lawsuit alleging that Rocket – along with Solidifi U.S., Maverick Appraisal Group, and specifically Maksym Mykhailyna – discriminated against a Black homeowner in Denver who was refinancing her property.

She says appraiser Maksym Mykhailyna with Maverick Appraisal Group and the appraisal management company Solidifi undervalued her property due to her race. 

Mykhailyna settled on $640,000 for the woman’s duplex even though it had been valued at $750,000 in 2018 and $860,000 in 2020. He also used “unsupportable methodological choices,” such as comparing the property to those in different neighborhoods with bigger Black populations, according to officials.

Solidifi and Rocket Mortgage failed to correct the report despite concerns, and when the homeowner alerted Rocket Mortgage that she suspected bias, the company would only proceed with the loan application based on the allegedly discriminatory appraisal amount. The homeowner was ultimately denied a loan, a move that the U.S. labels retaliation.

“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,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. 

The Department of Housing and Urban Development charged Rocket over this incident in July. It said Mykhailyna, Solidifi, and Rocket Mortgage violated the Fair Housing Act, which prohibits discrimination in appraisals.

A spokesperson at Rocket Companies argued that HUD was trying to “score headlines” by naming them in their case.

“Under federal law, mortgage lenders are required to work at arm’s length during the appraisal process, partnering with independent appraisal management companies who assign the work to state-licensed professional appraisers. The law’s intent is to determine the home’s value without any input or bias from the lender or any other party with interest in the transaction,” the spokesperson said.

Rocket leaders called the lawsuit a “massive overreach” by the government.

“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.”