(CBS DETROIT) – The Justice Department has filed a lawsuit against Detroit-based Rocket Mortgage, alleging that the company canceled a Black homeowner’s refinance application after she reported that her home was undervalued due to racial bias.
The federal lawsuit was filed on Monday in the U.S. District Court for the District of Colorado against the company and two appraisers, Solidifi U.S. Inc. and Maverick Appraisal Group Inc., and Maverick’s CEO, Maksym Mykhailyna.
The woman lives in Denver, Colorado, where the home was previously appraised at $860,000, according to the complaint.
According to the lawsuit, the woman contacted Rocket Mortgage to refinance her home. The mortgage company contracted with Solidifi Inc. to conduct an appraisal, and Solidifi retained Mykhailyna to complete the appraisal. The Justice Department claims Mykhailyna appraised the home at $640,000, about $220,000 lower than the home’s previous valuation.