A Black couple in Maryland has brought a lawsuit against a mortgage loan provider and a local real estate appraiser, claiming they were in direct breach of the Fair Housing Act after appraising the couple's home unfairly low due to their race.
Shani Mott and Nathan Connolly, who are both Black and professors at Johns Hopkins University, are suing loandepot.com, 20/20 Valuations LLC, and the latter's owner Shane Lanham.
The couple is alleging 20/20 Valuations LLC discriminated against them by "dramatically undervaluing their home in an appraisal because of [their] race and their home's location adjacent to a Black census block, notwithstanding that it is also located within Homeland, an affluent, mostly white neighborhood," per CNN.
Mott and Connolly also claim that loandepot.com relied on that appraisal when they denied their finance loan, and so are also suing the mortgage loan provider for discriminating against them.
The claims come after legal documents show the couple initially applied to refinance their mortgage on the home, which is in a predominantly White neighborhood in Baltimore.
However, Mott and Connolly realized something didn't quite add up when 20/20 Valuations LLC appraised the property at $472,000 - which was almost $100,000 below the already conservative estimate loandepot.com had given their property, per the New York Times,
After purchasing the home in 2017, Mott and Connolly had improved the home significantly with roughly $40,000 worth of renovations. They believed this would increase the value of their property, which they had originally bought for $450,000.
They were then understandably dumbfounded at the low appraisal, especially since they had researched that property prices in the area had increased by up to 42 percent since 2017, they told the New York Times.
Based on 20/20 Valuations LLC's appraisal, the mortgage loan provider denied the couple's request to refinance their mortgage, the court documents show.
Mott and Connolly, sensing this was the result of their race, decided to "whitewash" their home before having a second appraisal with a different company. They removed all items and images from their home that could identify the owners as Black, and even had a white colleague stand in their place when presenting the property.
Doing this, it seems, confirmed the couple's suspicion that their low appraisal was racially motivated - the second appraisal valued their property at $750,000, which was a significantly higher amount than their original $472,000 valuation.
Connolly, who is a doctor of history at Johns Hopkins University, said he immediately understood the initial appraisal was based on account of his race. In fact, the New York Times report revealed the professor is an "expert on redlining and the legacy of white supremacy in American cities, and much of his research focuses on the role of race in the housing market."
Per the Fair Housing Act, 'redlining' is "the practice of denying a creditworthy applicant a loan for housing in a certain neighborhood even though the applicant may otherwise be eligible for the loan."
In fact, multiple other couples have come forward to describe their experiences with the racially biased nature of the housing market. CNN covered the experience of another Black couple from California who also whitewashed their home and had a White friend stand in their place for a property appraisal.
Their home was valued at $1.4 million - a whopping $500,000 higher than their original appraisal.
"What that appraisal did is what we were actually asking the appraisers to do, to not consider race, to not consider neighborhoods and or the lines that have been drawn and perpetuated by redlining," the couple told CNN.
Racial discrimination in the housing market has been studied by Redfin, who reported that homes in majority Black neighborhoods have been significantly undervalued by an average of $46,000 based upon data from more than 73 million single-family homes listed and sold between January 2013 and February 2021, per CNN. Evidently, there remains a considerable divide between houses sold in Black versus white neighborhoods.
Mott and Connolly's lawsuit has forced a renewed focus on structural inequality and the racial discrimination in the US housing market.
Their attorney, Gabriel Diaz, told CNN: "I think that this is an issue that is not properly understood, not widely understood. Hopefully, the case will allow people to understand and appreciate and also change the anger so that this doesn't happen to people going forward."
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