On August 15, 2022, Relman Colfax filed a lawsuit in federal court against real estate appraiser Shane Lanham, real estate appraisal company 20/20 Valuations, LLC, and residential mortgage lender loanDepot.com, LLC, on behalf of Baltimore homeowners Drs. Nathan Connolly and Shani Mott. The lawsuit alleges that defendants engaged in racial discrimination in a home appraisal and seeks relief under the federal Fair Housing Act, Equal Credit Opportunity Act, the Civil Rights Act of 1866, and Maryland fair housing laws.
Drs. Mott and Connolly are a Black couple who own a home in the historic district of Homeland, an attractive, generally white neighborhood in Baltimore, Maryland. Plaintiffs applied to loanDepot to refinance their mortgage and loanDepot hired Lanham via 20/20 Valuations to conduct an appraisal of plaintiffs’ home.
The lawsuit, filed in the U.S. District Court for the District of Maryland, alleges that Lanham dramatically undervalued plaintiffs’ home at $472,000 because of plaintiffs’ race and their home’s location adjacent to the only area of Homeland that has a significant Black population. loanDepot knowingly relied on this discriminatory appraisal to deny plaintiffs a refinance loan and retaliated against plaintiffs when they told loanDepot’s loan officer that the appraisal was infected by discrimination.
The complaint describes the many ways in which Lanham’s appraisal was flawed and racially discriminatory. For example, he improperly limited his search for comparable recently sold properties, selected ill-suited homes for comparison, and failed to consider recent improvements that plaintiffs made to their home. Lanham also questioned whether plaintiffs were legitimate residents of Homeland by asking if they paid dues to the Homeland Association. Significantly, when plaintiffs later re-applied for a refinance loan with a different lender and “whitewashed” their home – by replacing family photographs and many other markers of Black identity with items borrowed from white friends and having a white colleague pose as the homeowner during the appraisal – the home was valued at $750,000, almost 60% higher than Lanham’s appraisal.
A New York Times article – published on August 18, 2022 and titled “Home Appraised with a Black Owner: $472,000. With a White Owner: $750,000” – profiles Drs. Connolly and Mott. The article highlights their claims, as well as the systemic nature of appraisal discrimination in the United States. CNN also published an article featuring plaintiffs’ experience titled “Black Couple Sues After They Say Home Valuation Rises Nearly $300,000 When Shown by White Colleague.” Drs. Connolly and Mott gave an extended interview to ABC News, which is available here.
The Relman Colfax litigation team includes John Relman, Gabriel Diaz, and Soohyun Choi, with paralegal assistance from Don Scales, Margaret Moran, and Max Niles.
A copy of the complaint may be found here.