BALTIMORE COUNTY, Md. — The lawsuit of a Maryland couple against a real estate appraiser and online mortgage provider is sparking renewed outrage among housing advocates and researchers familiar with well documented cases of low home appraisals for minority homeowners and houses in minority-majority neighborhoods.
Dr. Nathan Connolly and his wife, Dr. Shani Mott, sued 20/20 Valuations LLC, its owner, and LoanDepot.com Monday. Their lawsuit alleges the couple was discriminated against when their Baltimore home was undervalued due to their race. The lawsuit added that LoanDepot.com also discriminated against the couple by relying on the appraisal and denying their refinance loan application.
20/20 Valuations estimated the value of their home at $472,000, a slight increase from $450,000 purchase price in 2017, court records shows. The couple was showed. The lawsuit claims they spent $35,000 in renovations and the house appraised during the height of the market frenzy. The appraisal simply didn’t make sense, the lawsuit added.
The couple tried to appeal the appraisal and said they were met with silence. Months later, the couple moved forward with another refinance loan. They would go through the appraisal process all over again.
Connolly, who is a professor at Johns Hopkins University, had a White colleague stand in for the second appraisal and removed any indication that a Black family lived in the house. The second appraisal showed a dramatic increase. The house was valued at $750,000.
“Black families shouldn’t need White saviors to get the home values they deserve,” said Dr. Andre Perry, Senior Fellow at the Brookings Institute.
Research conducted by Perry noted the misvaluation of houses owned by Black and Brown families resulted in an average loss of $48,000 in value.
“This is the money families use to uplift themselves,” said Perry in an interview with WUSA 9. “This is robbing families of vital resources.”
In November of 2021, WUSA 9 published extensive reports of Black families in Prince George’s County who had similar experiences with lower than expected home appraisal. None of them sued or filed formal complaints. But they did form the Fair & Unbiased Appraisal Advocates; an advocacy group of homeowners and stakeholders committed to addressing alleged home appraisal bias throughout the region.
“While Connolly and Mott knew how to effectively advocate for themselves to get a more accurate appraisal, many homeowners don’t or simply can’t. You can’t whitewash an entire neighborhood or county that’s predominately Black,” said Jackie Priestly, Co-Founder of FUAA. “We know the misvaluation of Black-owned homes is widespread. We also know federal and state fair housing and fair lending reform are long overdue.”
In March, families involved in WUSA 9’s home appraisal bias investigation were invited to the White House as the Biden Administration announced an action plan from its Interagency Task Force on Property Appraisal and Valuation Equity. Some of those items included diversity training for appraisers and diversification of the appraisal workforce, which overwhelming made up of White Males, data shows.
“I want to see policy. We need data transparency and regulations,” said Perry noting that while the home appraisal industry self-regulates more is needed to combat bias in the appraisal process.