Rocket Mortgage sues HUD over appraiser independence issue

Rocket Mortgage has initiated legal action against the US Department of Housing and Urban Development (NS:HUDC ) (HUD) by filing a lawsuit in Federal District Court. The lawsuit addresses a dispute over the responsibility for the work of an independent appraiser.

Rocket Mortgage contends that the Department of Justice (DOJ) has incorrectly assigned blame to the company for the actions of an appraiser who was hired by a separate appraisal management firm.

The crux of the lawsuit is to resolve what Rocket Mortgage perceives as a contradiction between the government's regulations, which mandate the independence of appraisers, and the enforcement actions that attempt to make lenders accountable for the appraisers' conduct. Rocket Mortgage is seeking legal clarification on these matters through its lawsuit.

In conjunction with the lawsuit, Rocket Mortgage has also submitted a motion to dismiss the claim brought against it by the DOJ. The company is challenging the government's stance and is pushing for a dismissal of the claim that holds it responsible for the independent appraiser's work.

The legal proceedings follow the DOJ's recent claim, which implicated Rocket Mortgage in issues related to an appraisal conducted by an independent professional. Rocket Mortgage is disputing this claim, emphasizing the separation between its operations and the appraiser's work, which was managed through an independent company.

Rocket Mortgage's actions reflect its stance on maintaining a clear distinction between lender responsibilities and the independent work carried out by licensed appraisers in the real estate industry.

The outcome of the lawsuit and the motion to dismiss could have implications for how lender liability is interpreted in relation to independent appraisal work.

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Source: Investing.com