"U.S. Judge Gordon P. Gallagher ruled Friday that Rocket's motion to dismiss failed to address key theories of liability. While the company argued it was barred by law from changing the appraisal, Gallagher said regulations permit lenders to obtain additional valuations of a borrower's property. Nowhere in its motions or replies does Rocket address its alleged ability to order a separate appraisal or explain its failure to do so even after receiving Cheroutes's complaint about racial discrimination."
"According to the DOJ, Mykhailyna relied on sales from predominantly Black neighborhoods farther from the subject property while ignoring closer comparable sales. His valuation came in more than $200,000 below a prior appraisal, despite Denver home prices rising 25% during that time. After the homeowner complained to Rocket Mortgage, the company canceled her refinance application, she alleges."
DOJ alleges that defendants undervalued a Black homeowner's Denver property in a 2021 appraisal and that Rocket Mortgage retaliated by canceling her refinance application after she reported discrimination. The appraisal by Mykhailyna reportedly relied on sales from predominantly Black neighborhoods farther from the subject property while ignoring closer comparable sales, producing a valuation more than $200,000 below a prior appraisal despite Denver home prices rising 25%. U.S. District Judge Gordon P. Gallagher denied Rocket's motion to dismiss for failing to address key liability theories, and rejected Solidifi's independent-contractor shield, noting federal regulations allow additional valuations and recognize contractors as agents.
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