Rocket Mortgage, the nation’s largest mortgage lender, picked up a recent legal win as President Donald Trump’s new administration takes over two other high-profile cases involving the company.
The Fourth Circuit Court of Appeals in West Virginia dismissed the bulk of a $10.6 million judgment against the company and affiliate, Amrock LLC, according to court records. The judgment was from to a 2012 class-action lawsuit that claimed the mortgage company had improper influence over appraisals.
“We conclude that the plaintiffs have not established that the class members, as borrowers, suffered a concrete harm as a result of the defendants’ transmission to appraisers of their home-value estimates, and therefore we reverse the district court’s judgment to the extent that it certified the class and awarded its members damages,” the appeals court noted in its ruling.
The Michigan-based lender said it won’t stop fighting.
“Rocket Mortgage will never stop fighting for justice when we did nothing wrong – no matter how long it takes,” the company said in a statement. “This case has been in front of the Fourth Court of Appeals three times, and even the U.S. Supreme Court. After more than 13 years of standing up for the truth, we have been vindicated by this ruling. It shows that the court system can work if you have the fortitude to stand up for what’s right.”
That statement comes as Rocket faces down the federal government in two other lawsuits.
In December, Rocket Mortgage filed a lawsuit against the U.S. Department of Housing and Urban Development over what Rocket Mortgage sees as the misuse of the Fair Housing Act. Rocket Mortgage says HUD wants it to leave appraisers alone while the DOJ wants it to make sure appraisers don’t engage in discriminatory practices. That puts the company “between the proverbial ‘rock and a hard place,"” Rocket attorneys wrote in a complaint.
Rocket’s lawsuit was in response to a U.S. Department of Justice suit against Rocket over the alleged conduct of an independent appraiser. The Justice Department claimed Rocket discriminated against a Black homeowner who got an allegedly low appraisal when seeking to refinance her loan.
The Justice Department alleged that Rocket Mortgage LLC; Solidifi US Inc.; Maverick Appraisal Group Inc.; and appraiser Maksym Mykhailyna discriminated against a Black homeowner, Francesa Cheroutes, by undervaluing her home based on her race in an appraisal required as part of a home mortgage refinance application. The feds also alleged that Rocket Mortgage retaliated against the homeowner and interfered with her rights by cancelling her mortgage refinance application when she reported alleged discrimination.
Conservative groups have rallied against the DOJ suit.
Rick Manning, president of Americans for Limited Government, said Trump’s newly created Department of Government Efficiency should get involved and called the DOJ lawsuit absurd.
“It is important to note that while a mortgage company may contract with the appraiser, the law requires that the appraisal be completely independent of the mortgage company,” he said. “In other words, it is illegal for the mortgage company to put their thumb on the scale in the determination of the value of a house under consideration for financing.”
Rocket Mortgage previously called it a smear campaign.
The company noted that it originated three home loans for the borrower named in the lawsuit. The company also said the borrower’s loan is being serviced by Rocket Mortgage, and also was being serviced by Rocket Mortgage at the time of the appraisal in question. When the applicant raised concerns with the home’s valuation during this refinance, Rocket Mortgage offered a path to challenge the appraisal through a value reconsideration process. The borrower declined to engage in that process on two separate occasions, according to the complaint.
“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 news release announcing the DOJ’s lawsuit,” Bill Emerson, president of Rocket Companies, said at the time. “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.”
