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Couple’s lawsuit alleges appraisal firm undervalued their home based on race

ABC News

(HOMELAND, Md.) -- A Black couple whose home valuation increased nearly $300,000 after their Homeland, Maryland, property was re-appraised with a white colleague serving as the homeowner is suing two firms alleging racial discrimination.

Nathan Connolly and Shani Mott, who are both professors at Johns Hopkins University in Baltimore, allege that Shane Lanham of 20/20 Valuations racially discriminated against them by undervaluing their 2,600-square-foot home at $472,000. That’s just over the $450,000 they paid for the home in 2017, according to the lawsuit. Their complaint states that they invested more than $50,000 in renovations and improvements between 2020 and 2021.

The couple is also suing loanDepot, alleging the company discriminated against them by using the 20/20 Valuations appraisal to deny them a refinance loan.

“My jaw dropped. I was like, this is racism. Because we had done the research, right?” said Mott, during an interview with ABC News Live. “We didn’t go into this process, this refinance process, blindly.”

A spokesperson for loanDepot issued a statement to ABC News.

“We strongly oppose bias in the home finance process and support the plans to combat appraisal bias and promote more sustainable, affordable housing for minority and low- to moderate-income families and communities put forth by the Interagency Task Force on Property Appraisal and Valuation Equity and by the Mortgage Bankers Association. While appraisals are performed independently by outside expert appraisal firms, all participants in the home finance process must work to find ways to contribute to eradicating bias.”

Lanham declined a request for comment.

Mott, an Africana Studies lecturer, said she and Connolly, a professor of history focusing on racism, capitalism and notions of property, had reviewed several comparable homes and educated themselves on what to expect. Based in their research, the couple found the $472,000 valuation “impossible.” Earlier this year, they looked to another lender for an appraisal, this time removing their children’s artwork, artifacts and other signs that indicated a Black family resided in the home. Then, Connolly and Mott had a white colleague answer the door when the new appraiser arrived.

The new home appraisal was $750,000.

“We were aware that there were examples of whitewashing being effective in helping Black families get the value that they were entitled to,” Connolly said of how the couple came to “curate” the house to appeal to appraisers’ potential expectations of a more valuable home.

Paige Glotzer, the author of "How the Suburbs Were Segregated: Developers and the Business of Exclusionary Housing - 1890-1960," told ABC News that they see a deeply rooted connection in Connolly and Mott’s lawsuit to racially exclusive housing covenants that once prohibited Black residents from living in Homeland, a still predominantly white neighborhood. Glotzer is also an assistant professor and the John W. and Jeanne M. Rowe Chair in the History of American Politics, Institutions, and Political Economy at University of Wisconsin-Madison. Glotzer is also Connolly’s former Ph.D. advisee.

“The creation of Homeland was so bound up with the codification of discrimination in a national real estate industry,” Glotzer said. “That was a moment where you really had everyone, both consumers and home buyers, acknowledging that race was a part of property value.”

According to Glotzer, signs of Blackness in the home from books, art, and decorations are as significant in marking a ‘Black home’ as the physical presence of Black homeowners.

“And part of this process, it really did require us to think about what whiteness represents. Right? If you whitewash your house, you're going in with historical awareness of what is it that your average kind of white appraiser would want to see,” Mott said. “We kind of tapped into our historical imagination, but also our historical knowledge and kind of set out on a course to do that.”

Gabriel Diaz, an attorney at civil rights law firm Relman Colfax PLLC who is representing the family, told ABC News that his clients’ case “illustrates how pervasive this issue is” and highlights the emotional and financial harm it may cause. He said this lawsuit is about making sure people understand how disparate appraisals like Connolly and Mott’s happen so that they don’t happen again.

ABC News' Victoria Moll-Ramirez and Milan Miller contributed to this report.

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