One of the nation’s biggest mortgage lenders has just settled a large dispute from 2022 when a Black family caught them undervaluing their home.
Even after settling a lawsuit and offering to make sweeping changes to their policy last week, the company, LoanDepot, still denies any wrongdoing.
Evidence of Discrimination in Maryland
The couple who launched the lawsuit, Nathan Connolly and Shani Mott, say that an appraiser dramatically undervalued their home. They think that their race was the sole reason for the low valuation.
Their home in Baltimore was located next to a large Black census block nearby a mostly white neighborhood. The couple knew that something was wrong when the appraisal of their home came out to be a drastically different number than similar-looking houses just a block away.
The Appraiser Denies Allegations
The appraiser working for the company at the time, Shane Lanham, denies any that he did his job incorrectly and claims that his appraisal was not racially motivated.
To add insult to injury, when the appraisal came out shockingly low, the loan application was denied by LoanDepot due to the “low valuation” of the home. It appears that they only lend mortgages to larger estates.
The Difference an Appraisal Makes
In the 2022 lawsuit, the couple alleges that the loan officer estimated that the home was worth $472,000, which was already well below the initial estimate given by the group.
After the couple challenged the price tag, the company denied the report and maintained that their appraisal was accurate.
The Couple Felt Something Was Wrong
In the following communication, the family felt that the mortgage lender was treating them strangely.
After sending a letter describing the inaccuracies in the appraisal and the suspicion of race based discrimination, the company replied without mentioning any of the discriminatory actions. As well, the company began screening the family’s phone calls and dodging their communication all together.
Appraisal Do-Over With Different Family Photos
Once Connolly and Mott had a suspicion that their first home appraisal was a flop, they decided to hire a different company to complete the appraisal a second time.
With the new appraisal company, the family decided to try and see if the price of their house was actually based on race or not. Instead of their own beloved family photos, the couple put up photos of a white family.
Acquaintance Performed as the Homeowner
Since the family couldn’t show up as themselves and also have photos of a white family around their house, they decided to go all out with the ruse.
In a common practice referred to as “white washing”, where the Black accomplishments are credited to white peers, they had a white associate impersonate them and show the house to the new appraiser.
Surprising Results for the Family
After the second appraiser’s visit, the family was shocked to see just how much their home improved in value.
With a whopping $300,000 increase in value, the home owners’ fears were now confirmed that the value of their home took a hit simply because they were Black.
Tragedy Hit the Family
During the time between the lawsuit and the finalization of the ruling, an unforeseeable series of events rocked the Baltimore based family.
After a lengthy battle with cancer, Shani Mott died on March 12, just four days before her 48th birthday. She was a professor of Black studies at Johns Hopkins University and often delved deep into the conversation of race and power in America. She was a dedicated professor and her husband says that she had a passion for teaching.
Lawsuit Settlement Was a Bittersweet Win
Although Connolly had finally won his battle with LoanDepot over their 2022 discrimination case, the win came at a dark time in his life.
Connolly and their three children have received an undisclosed payout from the company. They also hope that bigger changes can be made and avoid issues of race discrimination in the future.
LoanDepot Makes a Statement
In an official statement to The New York Times, a spokesperson for the company stated that they oppose bias in the “home finance process”.
Although they continue to deny all of the allegations raised by Connolly and Mott, they did introduce new measures to provide additional resources to customers during the appraisal process.
Other Similar Incidents Proving Bias
Jude Jean Paul Bernard, a homeowner in New York City has his massive home shown with and without signs of a Black family living there.
Although his neighbors home was appraised at $4.8 million, his home clocked in at a measly $4.4 during the first showing where he displayed Black artwork and photos of his real family. After showing the home to a second appraiser with a white washed version of art and family photos, the appraisal jumped up $500,000.
