In a recent discussion on the HousingWire Daily podcast, Bill Emerson, president of Rocket Companies, asserted that the U.S. Department of Housing and Urban Development (HUD) has wrongly implicated Rocket in its latest lawsuit.
He emphasized that, according to established regulations, appraisals should remain independent of lenders.
Legal Action Against HUD
During the conversation with Editor in Chief Sarah Wheeler, they examined why Rocket Companies decided to take legal action against HUD.
Emerson expressed concerns about the misleading emphasis on Rocket’s involvement in the lawsuit and argued that the real accountability should rest with the appraisers, particularly Solidifi, the company responsible for managing the appraisal process.
Emerson referenced the Dodd-Frank Act, established in 2010, which clearly mandates appraisal independence—ensuring that lenders have no influence on property valuations.
He voiced worry that HUD’s decision to highlight Rocket’s name was more about garnering media attention than it was about addressing the issues at hand.
Throughout the proceedings, he maintained that Rocket has consistently followed all relevant legal and regulatory standards.
Clarifying HUD Claims
Clarity, according to Emerson, is crucial within the industry.
He criticized the inconsistent enforcement practices among regulators and reiterated that the principles of appraisal independence are clear and should be upheld.
When asked about HUD’s claims regarding the alleged misuse of the Fair Housing Act and the support provided to an affected homeowner, Emerson clarified the situation.
He noted that the homeowner in question was a returning client who sought assistance after a recent appraisal fell short of their expectations.
This appraisal was conducted by an independent, licensed appraiser.
When the customer expressed their displeasure, Rocket offered to reconsider the appraisal on two separate occasions, but the client ultimately chose not to pursue the matter further.
Addressing Appraisal Bias
Wheeler then probed into whether HUD’s actions signaled a larger industry message.
Emerson agreed, suggesting that while the goal of eradicating discrimination and bias in housing is vital, it is equally important to hold the right entities accountable, particularly the appraisers, and not the lenders who have limited control over these outcomes.
Emerson also discussed how the lending industry could tackle appraisal bias, acknowledging the constraints posed by current legal frameworks.
While lenders have minimal influence, they can enhance their efforts by utilizing data more effectively.
He underscored the importance of combining artificial intelligence with human oversight to analyze appraisal data thoroughly.
As the conversation unfolded, they considered the necessity for possible changes in federal regulatory policies.
Emerson expressed optimism about the potential benefits that could emerge from such modifications, though he recognized that varying regulations among states could complicate their implementation.
Despite this, he remained hopeful that the industry could gain from a reevaluation of the existing regulatory landscape to encourage positive developments.
Source: Housingwire