Rocket Mortgage scored a big win this week after the Fourth Circuit on Thursday vacated a $10 million judgment in a class action over a decade old.
A group of 2,769 West Virginian borrowers claimed in the lawsuit, which was originally filed on July 23, 2012, that Rocket Mortgage (known then as Quicken Loans) and its insurance arm, Amrock (formerly Title Source), were unfairly influencing home appraisal values. The group alleged that they paid for appraisals that were not independent since the defendants had provided appraisers with the homeowners’ estimates of their homes’ values.
Initially, a court sided with the borrowers and awarded over $10 million in damages, including $3,500 in statutory damages per loan, to the group of homeowners who refinanced with Quicken Loans using appraisals that included property value estimates.
However, a 2021 Supreme Court decision, TransUnion LLC v. Ramirez, led to an appeal from the United States District Court for the Northern District of West Virginia to reduce the damages and send back the case to the district court for reconsideration.
The 2021 decision determined that only plaintiffs who can show concrete harm have standing to sue private defendants in federal court.
The latest ruling from the U.S Court of Appeals for the Fourth Circuit reads that “We conclude that the plaintiffs have not established that the class members, as borrowers, suffered a concrete harm as a result of the defendants’ transmission to appraisers of their home-value estimates, and therefore we reverse the district court’s judgment to the extent that it certified the class and awarded its members damages.”
Rocket Mortgage has faced other legal activity over the last year. In June, HUD charged the lender, two appraisal companies and one appraiser with allegedly issuing a biased valuation and denying a refinance loan to a Black homeowner in Denver. The Department of Justice followed suit in October. In December, Rocket hit back with a lawsuit of its own against HUD for the action. And on Wednesday, the Colorado Board of Real Estate Appraisers revoked the license for the appraiser who was part of that suit.
