This week, the Supreme Court vacated an order that would have seen Rocket Mortgage pay $9.7 million as a result of appraisal practices it engaged in more than a decade ago.
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Hello, LOs!
This week, the Supreme Court vacated an order that would have seen Rocket Mortgage pay $9.7 million as a result of appraisal practices it engaged in more than a decade ago.
As Flávia Furlan Nunes reported, the company, then known as Quicken Loans, allegedly inflated more than 2,700 appraisals — in one case by as much as $26,000, according to an expert witness for one of the lead plaintiffs. The borrowers received the loans, and were soon underwater.
The lender pointed out that in March, a dissenting judge had said it was fundamentally unjust to hold Quicken Loans responsible "for what was an industry-wide practice to provide relevant information to appraisers and that harmed [plaintiffs and class members] not one iota."
The ongoing litigation reveals just how high the stakes can be for issues surrounding compliance. In this case, Rocket Mortgage argued that not only were its actions compliant, but they were widespread and accepted business practices.
Of course, after the recession, federal regulators stepped in to put a firewall between those who originate loans and appraisers. The regulatory changes gave rise to a new industry — appraisal management companies — which have in turn drawn criticism from appraisers for their business practices.
LOs, what mortgage industry-wide practices, 10 years from now, do you think might still be under the microscope? Send a note to gkromrei@housingwire.com
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