Rocket Mortgage LLC has filed a countersuit against the U.S. Department of Housing and Urban Development (HUD) in Colorado federal court, challenging what it calls “conflicting and irreconcilable” mandates tied to a Fair Housing Act (FHA) lawsuit brought by the Department of Justice (DOJ). The legal battle centers on allegations of appraisal bias and raises questions about lender liability for third-party appraisals.
FHA Lawsuit Sparks Counteraction
The DOJ’s lawsuit, filed earlier this year, accuses Rocket Mortgage and other defendants of appraisal bias, alleging that an independent appraiser undervalued a Black applicant’s property during a refinance process. The government claims Rocket failed to request a new appraisal and later canceled the application, actions it says violate the FHA.
In its countersuit, filed Wednesday, Rocket Mortgage asserts that HUD’s stance conflicts with federal rules requiring lender noninterference in appraisers’ independent judgments. Rocket argues that it had “no right or authority” to alter the appraisal and is legally prohibited from doing so under the Dodd-Frank Act.
Conflict Over Appraiser Independence
The Dodd-Frank Act, enacted after the 2008 financial crisis, established strict standards for appraiser independence to prevent lender interference. Rocket contends that HUD’s expectations to “correct” appraisals contradict this independence, putting lenders in a legally untenable position.
