DENVER—The Department of Justice has sued Rocket Mortgage and two appraisal companies in Colorado federal court for allegedly undervaluing a woman's home here because she was Black, contending the mortgage company then canceled her refi application when she reported the alleged discrimination, Law360 reported.
DOJ accused Rocket Mortgage LLC, appraisal management company Solidifi U.S. Inc., appraisal company Maverick Appraisal Group Inc., and its owner, Maksym Mykhailyna, of violating the Fair Housing Act by discriminating against the homeowner, Francesca Cheroutes, Law360 said.
DOJ alleged that Mykhailyna had undervalued Cheroutes' home by over $200,000 after disregarding improvements to her property and using sales from properties outside her predominantly white neighborhood in his appraisal, despite having used homes in the neighborhood for a white homeowner's home appraisal shortly before, Law360 said.
When Cheroutes brought her concerns of racial discrimination to Rocket's attention, telling the company the appraisal was significantly lower than a previous one, the company canceled her refinance application, the DOJ alleged.
Rocket, DOJ said, was "reliably informed that the appraisal undervalued Ms. Cheroutes' property because of race or color,” Law360.
"Defendant had the authority to correct the discriminatory appraisal, or cause it to be corrected, but failed to do so," DOJ wrote in its complaint.
Cheroutes' duplex, according to the DOJ's complaint, is in a predominantly white neighborhood three miles from downtown Denver, a mile from the state capital's Congress Park, blocks from popular restaurants, and near one of Denver's wealthiest neighborhoods with some of the city's highest property values, Law360 said.
Approximately 77% of the population in Cheroutes' neighborhood is white and only 5% Black, the complaint says, Law360 noted.