Dr. Nathan Connolly and the estate of Dr. Shani Mott, who recently died, will receive a payment from their mortgage lender, which also agreed to several policy changes to discourage discrimination.
A Black couple who claimed an appraisal company undervalued their Baltimore home based on their race have settled their lawsuit against their mortgage lender, loanDepot, which has agreed to a number of sweeping policy changes that could offer significant relief to homeowners who allege racially biased appraisals in the future.
Under the settlement, Dr. Nathan Connolly and the estate of Dr. Shani Mott, who died on March 12, will receive a payment of an undisclosed sum, in addition to the policy changes that include immediately offering a second appraisal whenever there are indications of bias or discrimination.
Dr. Connolly and Dr. Mott, both faculty members at Johns Hopkins University, sued loanDepot, a mortgage lender, as well as Shane Lanham, an appraiser hired by a contractor for the company, in August 2022.
A year earlier, the couple had opened their home to Mr. Lanham, who is white, for an appraisal, and he put the value of their four-bedroom house in Baltimore’s Homeland neighborhood at $472,000. After the couple stripped their home of family photographs and had a white colleague pose as the homeowner, an action known as “whitewashing,” a second appraiser offered a value of $750,000. The couple said that the difference in value — nearly $300,000 higher — came because the second appraiser believed that the home’s owners were white.
The couple shared their story with The New York Times, drawing the attention of lawmakers and other homeowners concerned about appraisal bias. Last March, the Justice Department filed a statement of interest in the case, and Representative Maxine Waters, Democrat of California, who has made housing discrimination a priority, hopes to introduce a bill to end racial bias in home appraisals later this year.
The settlement, which their lawyers said was accepted in U.S. District Court in Maryland on Monday, resolves Dr. Connolly and Dr. Mott’s claims against loanDepot, which continues to deny any allegations of wrongdoing. It does not resolve their claim against the appraisal company and Mr. Lanham, who also denies allegations of bias and has countersued for defamation.
