Rocket Mortgage Sues United States Department of Housing and Urban Development
Rocket Mortgage (NYSE: RKT) has filed a lawsuit against the U.S. Department of Housing and Urban Development (HUD) and a motion to dismiss the Department of Justice's (DOJ) claim against the company. The legal actions address conflicts between government regulations requiring appraiser independence and enforcement actions holding lenders liable for independent appraisers' conduct.
The DOJ's October 2024 complaint stems from an alleged discriminatory appraisal by an independent appraiser. Rocket Mortgage argues it had no legal authority to correct the appraisal, as government requirements under the Dodd Frank Act and TILA mandate lender independence from the appraisal process. The company offered the borrower a value reconsideration process, which was declined twice.
Rocket Mortgage (NYSE: RKT) ha intentato una causa contro il Dipartimento degli Edifici e dello Sviluppo Urbano degli Stati Uniti (HUD) e ha presentato una richiesta di archiviazione della denuncia del Dipartimento di Giustizia (DOJ) contro l'azienda. Le azioni legali affrontano i conflitti tra le normative governative che richiedono l'indipendenza dei periti e le azioni di enforcement che rendono i prestatori responsabili per la condotta dei periti indipendenti.
La denuncia del DOJ di ottobre 2024 deriva da una presunta valutazione discriminatoria effettuata da un perito indipendente. Rocket Mortgage sostiene di non avere l'autorità legale per correggere la valutazione, poiché i requisiti governativi ai sensi del Dodd Frank Act e del TILA impongono l'indipendenza dei prestatori dal processo di valutazione. L'azienda ha offerto al mutuatario un processo di riesame del valore, che è stato rifiutato due volte.
Rocket Mortgage (NYSE: RKT) ha presentado una demanda contra el Departamento de Vivienda y Desarrollo Urbano de EE.UU. (HUD) y un motion para desestimar la denuncia del Departamento de Justicia (DOJ) contra la empresa. Las acciones legales abordan los conflictos entre las regulaciones gubernamentales que exigen la independencia de los tasadores y las acciones de ejecución que hacen responsables a los prestamistas por la conducta de los tasadores independientes.
La queja del DOJ de octubre de 2024 se origina en una supuesta tasación discriminatoria realizada por un tasador independiente. Rocket Mortgage argumenta que no tenía autoridad legal para corregir la tasación, ya que los requisitos gubernamentales bajo el Dodd Frank Act y el TILA exigen que los prestamistas sean independientes del proceso de tasación. La empresa ofreció al prestatario un proceso de reconsideración del valor, que fue rechazado dos veces.
로켓 모기지 (NYSE: RKT)는 미국 주택 도시 개발부(HUD)를 상대로 소송을 제기하고, 법무부(DOJ)가 회사를 상대로 제기한 주장에 대한 기각 신청을 제출했습니다. 이 법적 조치는 감정인 독립성을 요구하는 정부 규정과 독립적 감정인의 행위에 대해 대출자를 책임지는 집행 조치 간의 충돌을 다룹니다.
법무부의 2024년 10월 소송은 독립 감정인의 차별적 감정 평가와 관련이 있습니다. 로켓 모기지는 Dodd Frank 법과 TILA에 따른 정부의 요구 사항으로 인해 감정 평가를 수정할 법적 권한이 없었다고 주장합니다. 회사는 대출자에게 가치 재고 프로세스를 제공했으나 두 번이나 거절당했습니다.
Rocket Mortgage (NYSE: RKT) a intenté une action en justice contre le Département du logement et du développement urbain des États-Unis (HUD) et a déposé une motion pour rejeter la plainte du Département de la justice (DOJ) contre l'entreprise. Les actions juridiques traitent des conflits entre les règlements gouvernementaux exigeant l'indépendance des évaluateurs et les mesures d'exécution tenant les prêteurs responsables de la conduite des évaluateurs indépendants.
La plainte du DOJ d'octobre 2024 découle d'une évaluation discriminatoire présumée effectuée par un évaluateur indépendant. Rocket Mortgage soutient qu'il n'avait aucune autorité légale pour corriger l'évaluation, car les exigences gouvernementales en vertu du Dodd-Frank Act et du TILA imposent l'indépendance des prêteurs par rapport au processus d'évaluation. L'entreprise a proposé au prêteur un processus de réévaluation de la valeur, qui a été rejeté à deux reprises.
Rocket Mortgage (NYSE: RKT) hat eine Klage gegen das US-Ministerium für Wohnungsbau und Stadtentwicklung (HUD) eingereicht und einen Antrag auf Abweisung der Klage des Justizministeriums (DOJ) gegen das Unternehmen gestellt. Die rechtlichen Maßnahmen betreffen Konflikte zwischen den staatlichen Vorgaben, die die Unabhängigkeit von Gutachtern erfordern, und Durchsetzungsmaßnahmen, die Kreditgeber für das Verhalten unabhängiger Gutachter verantwortlich machen.
Die Klage des DOJ aus Oktober 2024 stammt von einer angeblich diskriminierenden Bewertung durch einen unabhängigen Gutachter. Rocket Mortgage argumentiert, dass es keine rechtliche Befugnis hatte, die Bewertung zu korrigieren, da die staatlichen Anforderungen gemäß dem Dodd-Frank-Gesetz und der TILA eine Unabhängigkeit der Kreditgeber vom Bewertungsprozess vorschreiben. Das Unternehmen bot dem Kreditnehmer einen Prozess zur Neubewertung des Wertes an, der zweimal abgelehnt wurde.
- Rocket Mortgage is America's largest mortgage lender according to 2023 HMDA data
- Company has received 22 J.D. Power top rankings for mortgage origination and servicing
- Legal proceedings against DOJ and HUD could result in litigation costs and reputational damage
- Regulatory conflict between appraiser independence requirements and enforcement actions creates operational uncertainty
Insights
This legal dispute between Rocket Mortgage and HUD/DOJ represents a significant regulatory challenge that could have broad implications for the mortgage lending industry. The core issue centers on the inherent conflict between federal regulations requiring appraiser independence and enforcement actions holding lenders accountable for independent appraisers' conduct. The case highlights a critical regulatory contradiction: lenders are legally prohibited from influencing appraisers' valuations under Dodd-Frank and TILA, yet the DOJ seeks to hold them responsible for not correcting allegedly discriminatory appraisals.
The lawsuit's outcome could establish important precedents regarding lender liability and reshape the relationship between mortgage lenders and independent appraisers. If successful, Rocket Mortgage's challenge could force regulatory clarity on appraiser oversight responsibilities and potentially shield lenders from liability for independent appraisers' actions.
While legal battles can create uncertainty, this case presents minimal immediate financial risk to Rocket Mortgage. With a
The broader impact on RKT's business model appears since the dispute focuses on regulatory interpretation rather than fundamental business practices. However, investors should monitor this case as its resolution could affect compliance costs and operational procedures across the mortgage lending industry. The company's strong track record in customer service and fair lending practices provides some insulation against reputational damage.
- The company also filed a motion to dismiss the claim the Department of Justice brought against the company
- DOJ's recent claim against Rocket Mortgage misplaced blame on the Company for work done by an independent appraiser hired by an independent appraisal management company
"It is unreasonable that the DOJ chose to sue Rocket Mortgage for the conduct of an independent appraiser. We will not stand idly by while the courts are used as venues to leverage our company's name to publicize the case instead of the pursuing justice against those who may have committed wrongdoing," said Bill Emerson, President of Rocket Companies. "Today's filings highlight the conflict between HUD's regulations and the DOJ's enforcement positions. We are looking forward to laying out all the facts of this case in court. Rocket Mortgage has thousands of passionate team members who focus every day on doing the right thing. It would be an offense to our workforce if we let the DOJ's and HUD's wrongful actions go unchecked."
On October 21, 2024, the Department of Justice (DOJ) filed a baseless complaint against Rocket Mortgage in the United States District Court for the District of
"It is notable that, in a case about the alleged actions of an independent appraiser that was contracted through an unaffiliated third party, Rocket Mortgage is listed first in the DOJ's filing and is the only company mentioned by name in the headline of the government's press release announcing the DOJ's lawsuit," Emerson added. "We have always been guided by the fundamental principle that all homebuyers and homeowners should be treated fairly and should have every opportunity to achieve their dream of owning their own home or using their equity to improve their lives. Our long, exemplary track record of fair housing lending speaks for itself."
The accusation of discrimination is against the independent appraiser who performed the appraisal, not Rocket Mortgage. Despite this, the DOJ surprisingly dragged Rocket Mortgage into a lawsuit based on the assertion that the company "had the authority to correct the [allegedly] discriminatory appraisal, or cause it to be corrected, but failed to do so." This is
It's important to note that 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.
The government's own requirements under the Dodd Frank Act and the changes to the Truth in Lending Act (TILA), that was enacted in 2010 in response to the Great Recession, mandate that a lender must obtain an appraisal from an independent state-licensed third-party appraiser to prevent conflicts of interest and undue influence on the appraisal process. The government's requirements also prohibit lenders from taking any action to influence the appraisal value "to be based on a factor other than the independent judgment of th[at] appraiser." The government cannot require Rocket Mortgage to rely only on an independent appraiser's opinion of value and – at the same time – find the company liable for not influencing or correcting the valuation.
Rocket Mortgage filed its complaint against HUD to seek judicial resolution of the conflicts HUD has created between the government-created mandates of appraiser oversight and appraiser independence. This resolution is necessary because HUD has failed to provide notice or an opportunity to comment on its policy change requiring lenders to oversee and "correct" the appraisals of independent, third-party appraisers.
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
- Issue 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.
Any assertion that Rocket Mortgage is biased is false. Rocket Mortgage remains committed to homeownership for everyone who can sustainably afford it. In fact, the company has introduced several programs in an effort to bridge the racial homeownership gap.
Rocket Mortgage is America's largest mortgage lender, having helped more Americans than any other lender according to Home Mortgage Disclosure Act (HMDA) data from 2023, the most recent time period available. The company has also been top-ranked in J.D. Power's client service studies for mortgage origination and mortgage servicing a total of 22 times over the past several years, more than any other lender.
The case is Rocket Mortgage, LLC vs United States Department of Housing and Urban Development filed in the United States District Court for District of
ABOUT ROCKET MORTGAGE
The lender enables the American Dream of homeownership and financial freedom through its obsession with an industry-leading, digital-driven client experience. In late 2015, it introduced the first fully digital, completely online mortgage experience. Since its founding in 1985, Rocket Mortgage has closed more than
J.D. Power has ranked Rocket Mortgage #1 in client satisfaction for both primary mortgage origination and servicing 22 times – the most of any mortgage lender. Rocket Companies, Rocket Mortgage's parent company, has placed in the top third of Fortune's list of the "100 Best Companies to Work For" the list for 21 consecutive years.
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SOURCE Rocket Mortgage
FAQ
Why did Rocket Mortgage (RKT) sue HUD in December 2024?
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