Federal regulators allege the companies involved undervalued a homeowner’s property because she is Black.
Downtown Denver. May 22, 2024.
Kevin J. Beaty/Denverite
The U.S. Department of Housing and Urban Development (HUD) has charged a group of appraisers and lenders with housing discrimination in Denver, alleging the companies involved undervalued a homeowner’s property because she is Black.
HUD announced the charge Monday against the appraisal company Maverick Appraisal Group, appraisal management company Solidifi U.S. Inc., the lender Rocket Mortgage, LLC and appraiser Maksym Mykhailyna.
In a statement, HUD claims that Mykhailyna and Maverick Appraisal group issued a low assessment of a Denver duplex owned by a Black woman, whose name was redacted in the charge. The woman’s mortgage application was ultimately denied.
“Other recent appraisals of the same property had steadily increased in value, yet this appraisal resulted in a dramatic drop, despite the Denver market experiencing substantial growth in home values at that time,” wrote HUD in a statement Monday. “To reach that low number, the appraisal was rife with inaccuracies and unsupportable methodological choices.”
Denverite has reached out to Maverick Appraisal group, Solidifi U.S. Inc. and Rocket Mortgage, LLC for comment.
HUD claims that the appraiser relied on comparable properties in neighborhoods with larger Black communities and excluded comparable neighborhoods with more white residents, “artificially” lowering the property value. The charge also claims that Mykhailyna deviated from his methodology and findings at similar properties with white owners in the area.
The charge alleges Solidifi and Rocket Mortgage failed to fix the appraisal report, and it blames Rocket Mortgage for only allowing a loan application based on the original appraisal.
Discriminating on the basis of race is outlawed under the federal Fair Housing Act, passed in 1968 as part of the Civil Rights Movement.
Denver, like many other U.S. cities, has a history of redlining, pushing Black communities and other minority groups into specific neighborhoods, undervaluing those properties and preventing families from getting mortgages. Such practices have limited many families from accumulating generational wealth through property ownership.
“Homeownership is crucial to build both generational wealth and housing stability for Black and Brown families,” said Diane M. Shelley, HUD’s Principal Deputy Assistant Secretary for Fair Housing and Equal Opportunity, in a statement Monday. “HUD will continue to vigorously enforce the Fair Housing Act against those who seek to limit the financial returns associated with homeownership because of race or any other protected characteristic.”
Next, a United States Administrative Law Judge will hear HUD’s charge unless any of the companies involved request to move the case to federal district court. If the judge finds housing discrimination occurred, they can award damages to the homeowner and civil penalties to the companies involved.
