this U.S. Department of Housing and Urban Development (HUD) announced Monday that it has charged lenders Rocket Mortgagetwo appraisal firms and an appraiser allegedly issued a biased appraisal and denied a refinance loan to a Black homeowner in Denver.
HUD Charges Appraiser Maksym Mykhailyna and Company, Maverick Appraisal Groupappraisal management company Solidifi USA Inc.and discrimination rockets under the Fair Housing Act.
A company spokesman did not immediately respond house lineRequest for comment.
HUD alleges that in January 2021, a black woman gave her home in a majority-white area of Denver an “intolerable” low rating.
HUD said that while home values are appreciating in the Colorado market, other recent assessments of the same property show steady increases in value. Her duplex is appraised at $640,000, about 25% less than what it paid for eight months ago.
According to HUD, the valuation suffered from “inaccuracies and unsupportable methodological choices,” including “inexplicable and substantial adjustments” to site dimensions and “incorrect measurements of interior square footage.” These assumptions reduce the value of the home.
Additionally, appraisers relied on comparable properties in majority-black neighborhoods and discarded comparable homes in neighborhoods with larger white populations. HUD says this is not the way to assess white property owners.
According to the charges, Solidifi and Rocket ignored “red flags” in the appraisals that required an appraisal during the application process and ultimately denied the applicant a refinance loan.
“Homeownership is critical to the generational wealth and housing stability of Black and brown families,” Diane M. Shelley, HUD’s principal deputy assistant secretary for fair housing and equal opportunity, said in a statement expressed in. “The Department of Housing and Urban Development will continue to vigorously enforce the Fair Housing Act against those who seek to limit the financial rewards associated with homeownership because of race or any other protected characteristic.”
Unless either party chooses to hear the case in federal court, the case will be reviewed by an administrative law judge.
