A Black couple who filed an appraisal discrimination lawsuit, has reached a settlement. Nathan Connolly and the estate of Shani Mott, who passed away on March 12, settled a lawsuit alleging racial bias in a home appraisal conducted by mortgage lender loanDepot.
The couple, both faculty members at Johns Hopkins University, filed the lawsuit in August 2022. They named loanDepot and Shane Lanham, an appraiser hired by a contractor for the company, as defendants.
Dr. Connolly and Dr. Mott accused the defendants of racial bias after an initial home appraisal significantly undervalued their property in Baltimore’s Homeland neighborhood.
Their legal action highlighted a troubling trend in the housing market, where Black homeowners often face undervaluation of their properties compared to their white counterparts.
In response to the settlement, Jonathan Fine, a spokesperson for loanDepot, issued an emailed statement expressing the company’s stance on bias in the home finance process. “loanDepot strongly opposes bias in the home finance process,” Fine said. “While we continue to deny the specific allegations in this lawsuit and have made no admission of fault, we’re proud of the commitments announced today, which will formalize many of our existing practices and provide additional resources to help our customers in the appraisal and review process.”
The case garnered widespread attention after Dr. Connolly and Dr. Mott revealed their shocking revelations. A year earlier, Lanham, who is white, conducted an appraisal of the couple’s four-bedroom house. He valued it at $472,000. However, after the couple’s decision to remove indicators of their race and have a white colleague pose as the homeowner—an action known as “whitewashing”—a second appraiser offered a significantly higher value of $750,000.
The dramatic difference of nearly $300,000 led the couple to believe racial discrimination was at the center. They claimed that the second appraiser’s perception of the homeowners as white influenced the appraisal outcome.
John Relman, one of the lawyers representing Dr. Connolly and Dr. Mott said, “Nobody had done this before with respect to the reconsideration of value.” He continues, “Nathan and Shani very much wanted to get best practices in place that others could follow. And loanDepot, to their credit, was willing to not just talk the talk but walk the walk.”
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