Black home appraised low this time. Rocket mortgage on the agenda. Put it up for mass. The company has some answers they must give us mortgage. Rocket mortgage is facing backlash after a white appraiser lowballs [00:00:20] a black woman's Denver home by $220,000. The DOJ filed a racial discrimination suit on behalf of a black woman in Denver last week against Rocket Mortgage and two appraisal companies, the Department of Justice alleges they purposely lowballed [00:00:37] the value of her home because of her race. Let's get into it, Francesca. She was originally complained about, or to the US Department of Housing and Urban Development in 2021, [00:00:54] after she received an appraisal from Rocket Mortgage for her duplex home located in an upscale neighborhood of Denver. The home was appraised for $220,000, lower than one she'd received [00:01:13] only eight months earlier from rocket. Despite a booming housing market in Denver and substantial upgrades she made to the home, the new appraisal was also 200 and $200, 000 lower than an appraisal for a similar duplex property [00:01:33] nearby with a white owner that had been done by the same appraiser who is white. HUD determined there was, quote, reasonable cause to determine that the new appraisal was discriminatory and had violated the federal Fair Housing Act, [00:01:52] and referred her complaint to the Justice Department. She claims in the lawsuit filed in US District Court of the District of Colorado Monday, that she was looking to take advantage of historically low mortgage rates to refinance the home she'd owned and lived in since 2011, when. [00:02:12] Appraised by Maxim Mick Mick Mick Collina, the CEO of Maverick Appraisal Group in Denver. Came to evaluate the property January 2021. She said she made a note of a black of a Black Lives Matter sign in her front yard [00:02:28] and briefly talked to her about her college aged daughter, both of whom are black, while inspecting the unit they lived in. So, the woman said this appraiser showed no interest in her efforts to inform him of him about the $200,000 in improvements she made to the property [00:02:46] since the prior appraisal, including adding new gutters, doors, installing new granite countertops in the kitchen, and painting and updating bathrooms. He did not take any notes about the upgrades, which were not reflected in the appraisal he submitted. The next day, to solidify the appraisal management company [00:03:06] hired by Rocket Mortgage, the lender. The new appraisal valued her home at $640,000. $220,000 less than the appraisal done in May of 2020. [00:03:23] Surprised by the steep drop in her appraisal value, she contacted Rocket Mortgage to complain and requested a new appraisal. She told a loan officer she believed the appraiser had undervalued her property because of her race. She recounted the man's unfriendly, [00:03:38] disinterested manner during the site inspection and said she regretted being in the house during the inspection because the inspector was able to see that it was owned by a black person. We'll get into the cause and effect of that in a moment. Because rocket canceled her refinance application. [00:03:56] Her complaint says she was unable to obtain a refinance mortgage loan that would have had a lower interest rate, a shorter term, lower monthly payments. Afraid she would continue to be discriminated against by a different mortgage, a different mortgage company if she tried to refinance. [00:04:13] She obtained a variable rate home equity line of credit instead, which you know with terms that are less favorable. Okay. Financially, the experience with the appraiser, solidify and rocket caused the homeowner to suffer financial harm, emotional distress and humiliation, [00:04:32] the lawsuit claims. She seeks a jury trial and unspecified monetary damages that will, quote, restore her to the position she should have been in, but for the discriminatory conduct and for the court to order the defendants [00:04:53] from engaging in discrimination on the basis of race or color and future real estate, estate related transactions. The latter is actually already part of federal law. So she's basically asking the judge to issue an order that's already a law. [00:05:09] That's easy. The first part to restore her to where she should be, is very kind of her because the suit is not requiring nor requesting punitive. In this this is a very fair suit. As a matter of fact, I would argue too damn fair. [00:05:25] For the egregious behavior alleged in this case. But let's go back to some of the other cases we have covered that are similar. We have covered stories right here at indisputable where a family, black family, they get appraised very low. [00:05:42] They decide to then take out everything in the house that could identify that the family is black. One family decided to bring in their white friends [00:05:59] in order to assume the role of the owner. What happened each time? Each time the appraised value went up and it went up significantly. We're not talking about a 5 to $10,000 range here. [00:06:16] We're talking about a lot of money. This is why it's important. 99% of all of us in this country, the biggest investment we will ever make in our lives is a home. The largest investment we will ever make is a home. And that home creates some level [00:06:35] of equity as well as surety. If there's a bump in the road, whatever it may be. You have some options here. But when you take those options away, you're literally taking money away from us. And once again, the inequity [00:06:54] doesn't start with the outcome. It starts with the person who was supposed to do right by you. And that's what the inequity always starts. And so when we talk about equitable outcomes, we're not just talking about outcomes. We're talking about correcting the systems that are prerequisites to the inequity. [00:07:14] Alright, dear brother, we've seen this multiple times. This woman has not only a valid claim, the claim is so valid that every single federal agency from HUD to the DOJ agreed. This is an egregious error and it needs to be corrected. What say you? One of the. Things that you point out frequently is how powerful culture is. [00:07:31] And, you know how this is a good example into how a lot of our decisions are made before they even bubble up into the conscious mind based on what we believe. You know, like they just kind of rolled their eyes at this woman because there's no way this house is worth that much, or she shouldn't be profiting this [00:07:48] much off of the house or, oh, here we go. Another one of them thinking that they can, you know, so much to the point that, as you pointed out, the federal government was like, no, I don't know about this and how much pride is involved that they couldn't give her a fair appraisal. And also, this is this really goes to show the importance of who you hire. [00:08:05] Obviously culture starts first, but who do you have in place to make these types of decisions? Because now rocket Money is, you know, all nationally all over the news for stuff like this. When in reality they're just being unfair to her. So. Yeah, this is why we got to keep on fighting. [00:08:22] Because culture comes before everything else. That's right. Well said. We'll bring you updates as they come.