The Justice Department recently filed a lawsuit against Rocket Mortgage, claiming that they undervalued a Black woman’s home as part of ongoing allegations of housing discrimination.
Filed Monday, the case claims that Rocket Mortgage and multiple other companies dedicated to appraisals undervalued the home of Francesca Cheroutes because of her race. Per the Justice Department, when Cheroutes reached out to Rocket Mortgage as well as Solidifi U.S. Inc. and Maverick Appraisal Group Inc., her home was appraised by CEO Maksym Mykhailyna at $640,000.
When last checked, the home was appraised at $860,000, meaning the Denver home was appraised at nearly $220,000 less than the previous valuation. The sales were reportedly inaccurately drawn from homes located in predominantly Black neighborhoods.
When Cheroutes went to complain and have the appraisal redone on account of racial discrimination, the company allegedly declined and said that she needed to move forward with the lower appraisal price. Her application to refinance was canceled later on when she continued to highlight their discriminatory practices.
“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 per a press release. “Appraisal bias exacerbates the racial wealth gap, and runs contrary to the principles of fairness, transparency and equity that we need in our housing market today. The Justice Department will continue to hold appraisers, lenders and others who discriminate against loan applicants accountable for their actions.”
Justice Department Sues Rocket Mortgage, Appraisal Management Company and Appraiser for Race Discrimination in Mortgage Refinance Application
— DOJ Civil Rights Division (@CivilRights) October 21, 2024
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The DOJ’s latest case comes days after the U.S. Department of Housing and Urban Development announced that $22 million will be dedicated to fighting housing discrimination in the U.S.
With the funds, the department will provide monetary support for organizations devoted to enforcing fair housing laws. The money will also go towards educating citizens on their rights regarding housing as part of their “Education and Outreach Initiative.” Meanwhile, the “Private Enforcement Initiative” will focus on conducting investigations into potential violations of the Fair Housing Act.
“HUD’s partnership with fair housing organizations is critical to ensuring fair housing awareness and enforcement of our laws,” said the HUD Principal Deputy Assistant Secretary for the Office of Fair Housing and Equal Opportunity Diane M. Shelley per a release. “The grants made possible by this funding will strengthen this partnership and ensure that fair housing reaches all of our communities.”
