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Summary:
The Plaintiffs brought a class action lawsuit against Rocket Mortgage (formerly Quicken Loans) and its affiliate, Amrock, LLC (formerly Title Source, Inc.), regarding mortgage appraisals used in refinancing transactions, alleging that the defendants influenced home appraisals by transmitting homeowners' estimated property values to appraisers, thereby rendering the appraisals “worthless” and violating West Virginia consumer protection laws.
The court ruled that the class members lacked Article III standing under TransUnion LLC v. Ramirez (2021), which requires each class member to demonstrate concrete harm. The plaintiffs failed to show that all class members received biased or inaccurate appraisals, only that they paid for appraisals they later argued were "worthless." Because standing “is not dispensed in gross” in class actions, every class member needed to demonstrate actual harm.
Judge Floyd dissented from the majority’s decision to decertify the class, arguing that unnamed class members also have Article III standing because they suffered concrete financial harm due to Quicken’s appraisal practices, as each plaintiffs had actually paid for independent appraisals (averaging $350 per person) but did not receive truly independent valuations due to defendants' interference.
Commentary:
Appraisals of this sort frequently occur in bankruptcy, where valuation is frequently an issue, with the parties, whether the debtor, trustee or secured creditor seeking professional appraisals to support their positions regarding the value of assets. As providing advance estimates is "explicitly forbidden- and viewed as unethical" parties should not only refrain from providing those estimates, which would include details in the bankruptcy petition, but also, since appraisers are sophisticated professionals, amounts owed on liens, etc., as those could point the appraiser in the desired direction. Appraisers should be questioned about what information was provided in advance, since that can not only indicate a predetermined bias, but undermine the ethics and competence of the appraiser.
Further, when mortgage servicers conduct BPOs and then seek to pass those costs along to the homeowner, it is questionable whether those fees are reasonable if advance estimates were provided.
For a summary and commentary on the previous decision by the 4th Circuit in this case, see : Alig v. Quicken Loans- Improper Value Disclosures with Appraisal Requests
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