The U.S. Department of Justice (DOJ) has filed a lawsuit against Rocket Mortgage LLC, Solidifi US Inc., Maverick Appraisal Group Inc., and appraiser Maksym Mykhailyna, accusing them of racial discrimination in a home appraisal. The DOJ alleges that the defendants undervalued a Black homeowner’s Denver property by more than $200,000 during a mortgage refinance process—an alarming 25% decrease at a time when property values were rising.
The lawsuit stems from a 2021 incident in which the homeowner applied for a refinance loan from Rocket Mortgage. According to the DOJ, the appraisal conducted by Mykhailyna relied on sales from more distant, predominantly Black neighborhoods, rather than comparable sales in closer, predominantly white areas. This led to a drastic undervaluation of the home, which was located in a mostly white Denver neighborhood. Notably, Mykhailyna had used homes from nearby areas in a prior appraisal for a white homeowner.
“This lawsuit underscores the ongoing issue of appraisal bias, which disproportionately impacts Black communities and widens the racial wealth gap,” said Kristen Clarke, Assistant Attorney General for the DOJ’s Civil Rights Division. “No one should have to endure financial harm and indignity due to discriminatory practices in the housing market.”
The homeowner contacted Rocket Mortgage after receiving the appraisal, citing concerns of racial bias. Instead of addressing the complaint, Rocket Mortgage reportedly retaliated by canceling the refinance application. The homeowner filed a complaint with the Department of Housing and Urban Development (HUD), which found reasonable cause for discrimination, leading to the DOJ lawsuit.
This case highlights the growing issue of appraisal bias, where Black and Brown homeowners often face lower property valuations based on racial discrimination, preventing them from accessing equity and wealth-building opportunities. The Justice Department is committed to holding lenders and appraisers accountable for these violations of the Fair Housing Act.
If you or someone you know has experienced similar discrimination, reports can be filed with the DOJ or HUD through their websites or hotlines.
