Oct 30, 2024
Rocket Mortgage Sued Over Shocking Lowball Appraisal On Black Woman’s Home
Rocket Mortgage Sued Over Shocking Lowball Appraisal On Black Woman’s Home
- 8 minutes
Black home appraised low this time.
Rocket mortgage on the agenda.
Put it up for mass.
The company has some answers
they must give us mortgage.
Rocket mortgage is facing backlash
after a white appraiser lowballs
[00:00:20]
a black woman's Denver home by $220,000.
The DOJ filed a racial discrimination suit
on behalf of a black woman
in Denver last week against Rocket
Mortgage and two appraisal companies,
the Department of Justice alleges
they purposely lowballed
[00:00:37]
the value of her home because of her race.
Let's get into it, Francesca.
She was originally complained about,
or to the US Department of Housing
and Urban Development in 2021,
[00:00:54]
after she received an appraisal
from Rocket Mortgage
for her duplex home located
in an upscale neighborhood of Denver.
The home was appraised for $220,000,
lower than one she'd received
[00:01:13]
only eight months earlier from rocket.
Despite a booming housing market
in Denver and substantial upgrades
she made to the home,
the new appraisal was also 200 and $200,
000 lower than an
appraisal for a similar duplex property
[00:01:33]
nearby with a white owner that had been
done by the same appraiser who is white.
HUD determined there was, quote,
reasonable cause to determine that the
new appraisal was discriminatory and had
violated the federal Fair Housing Act,
[00:01:52]
and referred her complaint
to the Justice Department.
She claims in the lawsuit filed
in US District Court
of the District of Colorado Monday,
that she was looking to take advantage
of historically low mortgage rates
to refinance the home she'd owned
and lived in since 2011, when.
[00:02:12]
Appraised by Maxim Mick Mick Mick Collina,
the CEO of Maverick
Appraisal Group in Denver.
Came to evaluate the property
January 2021.
She said she made a note of a black of a
Black Lives Matter sign in her front yard
[00:02:28]
and briefly talked to her
about her college aged daughter,
both of whom are black,
while inspecting the unit they lived in.
So, the woman said this appraiser
showed no interest in her efforts
to inform him of him about the $200,000
in improvements she made to the property
[00:02:46]
since the prior appraisal,
including adding new gutters, doors,
installing new granite countertops
in the kitchen,
and painting and updating bathrooms.
He did not take any notes about
the upgrades, which were not reflected
in the appraisal he submitted.
The next day, to solidify
the appraisal management company
[00:03:06]
hired by Rocket Mortgage, the lender.
The new appraisal valued her home
at $640,000. $220,000 less
than the appraisal done in May of 2020.
[00:03:23]
Surprised by the steep drop
in her appraisal value,
she contacted Rocket Mortgage to complain
and requested a new appraisal.
She told a loan officer
she believed the appraiser had undervalued
her property because of her race.
She recounted the man's unfriendly,
[00:03:38]
disinterested manner during the site
inspection and said she regretted being
in the house during the inspection
because the inspector was able to see
that it was owned by a black person.
We'll get into the cause and effect
of that in a moment.
Because rocket canceled
her refinance application.
[00:03:56]
Her complaint says she was unable
to obtain a refinance mortgage loan
that would have had a lower interest rate,
a shorter term, lower monthly payments.
Afraid she would continue
to be discriminated against by a different
mortgage, a different mortgage company
if she tried to refinance.
[00:04:13]
She obtained a variable rate home equity
line of credit instead, which you
know with terms that are less favorable.
Okay. Financially, the experience with
the appraiser, solidify and rocket caused
the homeowner to suffer financial harm,
emotional distress and humiliation,
[00:04:32]
the lawsuit claims.
She seeks a jury trial
and unspecified monetary damages
that will, quote, restore her
to the position she should have been in,
but for the discriminatory conduct
and for the court to order the defendants
[00:04:53]
from engaging in discrimination
on the basis of race or color and future
real estate, estate related transactions.
The latter is actually
already part of federal law.
So she's basically asking the judge
to issue an order that's already a law.
[00:05:09]
That's easy.
The first part to restore her
to where she should be,
is very kind of her because the suit is
not requiring nor requesting punitive.
In this this is a very fair suit.
As a matter of fact,
I would argue too damn fair.
[00:05:25]
For the egregious behavior
alleged in this case.
But let's go back to some of the other
cases we have covered that are similar.
We have covered stories right here at
indisputable where a family, black family,
they get appraised very low.
[00:05:42]
They decide to then take out everything
in the house that could identify
that the family is black.
One family decided
to bring in their white friends
[00:05:59]
in order to assume the role of the owner.
What happened each time?
Each time the appraised value went up
and it went up significantly.
We're not talking about
a 5 to $10,000 range here.
[00:06:16]
We're talking about a lot of money.
This is why it's important. 99% of all of
us in this country, the biggest investment
we will ever make in our lives is a home.
The largest investment
we will ever make is a home.
And that home creates some level
[00:06:35]
of equity as well as surety.
If there's a bump in the road,
whatever it may be.
You have some options here.
But when you take those options away,
you're literally
taking money away from us.
And once again, the inequity
[00:06:54]
doesn't start with the outcome.
It starts with the person
who was supposed to do right by you.
And that's what the inequity
always starts.
And so when we talk about
equitable outcomes,
we're not just talking about outcomes.
We're talking about correcting the systems
that are prerequisites to the inequity.
[00:07:14]
Alright, dear brother,
we've seen this multiple times.
This woman has not only a valid claim,
the claim is so valid that every single
federal agency from HUD to the DOJ agreed.
This is an egregious error
and it needs to be corrected.
What say you? One of the.
Things that you point out frequently
is how powerful culture is.
[00:07:31]
And, you know how this is a good example
into how a lot of our decisions are made
before they even bubble up into the
conscious mind based on what we believe.
You know, like they just kind of rolled
their eyes at this woman because there's
no way this house is worth that much,
or she shouldn't be profiting this
[00:07:48]
much off of the house or, oh, here we go.
Another one of them thinking that they
can, you know, so much to the point that,
as you pointed out,
the federal government was like,
no, I don't know about this
and how much pride is involved that they
couldn't give her a fair appraisal.
And also, this is this really goes to show
the importance of who you hire.
[00:08:05]
Obviously culture starts first,
but who do you have in place
to make these types of decisions?
Because now rocket Money is,
you know, all nationally all over the news
for stuff like this.
When in reality
they're just being unfair to her.
So. Yeah,
this is why we got to keep on fighting.
[00:08:22]
Because culture comes
before everything else.
That's right. Well said.
We'll bring you updates as they come.
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