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Baltimore couple and Johns Hopkins University professors Drs. Shani Mott and Nathan Connolly made headlines on Monday with the close of their two-year legal battle against California-based mortgage behemoth loanDepot for discriminatory appraisal practices.
The settlement included an undisclosed monetary award and an extensive plan from loanDepot to mitigate any discrimination homeowners may face during the appraisal process through more than a dozen new policies. LoanDepot said the settlement isn’t “an admission of fault.”
“Nobody had done this before with respect to the reconsideration of value,” the couple’s attorney, John Relman, told The New York Times on Monday. “Nathan and Shani very much wanted to get best practices in place that others could follow. And loanDepot, to their credit, was willing to not just talk the talk but walk the walk.”
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Shani Mott | Credit: Johns Hopkins University
The couple’s victory is bittersweet, as Mott succumbed to adrenal cancer 10 days before the settlement was filed. According to her New York Times obituary, Mott spent her final days recounting the challenges she and Connolly faced when attempting to refinance their mortgage with loanDepot in 2021.
Appraiser Shane Lanham valued their home at $472,000, which the couple said was $75,000 below the conservative estimate their loan officer quoted. Lanham’s valuation led loanDepot to decline the couple’s application.
Suspicious of Lanham’s judgment, the couple dug into his past, which included a list of alleged discrimination claims from Black homeowners in Baltimore — one of which caught the attention of the United States Department of Housing and Urban Development. The couple presented their findings to loanDepot, but they refused to reconsider their refinancing request.
They refinanced their home with a different lender in 2022; except they removed all evidence of their racial background from the home (e.g., photographs, artwork, and other cultural signifiers) and asked a white friend to stand in. That appraisal came in at $750,000 — a 58 percent increase from Lanham’s valuation.
Nathan Connolly
“She burned through two oxygen tanks and was in a wheelchair the entire time,” Dr. Connolly told NYT.
He said Mott refused to take pain medication during the eight-hour deposition lest it stopped her from expressing the gravity of the lawsuit and what it meant not only for them but for scores of other homeowners of color.
“And her ability to speak forcefully and to be direct and, frankly, to be so crystal clear about how real estate works and, in particular, instruments within the structure of a mortgage transaction, it was a master class,” he added.
The appraiser, Shane Lanham, says he does not intend to settle and expects the accusations against him and his defamation counterclaim to go to trial.
Lanham’s attorneys said his appraisal was based on “market conditions that existed at the time.” As for the second appraisal, they said it was higher because it accounted for “home sales that had not even occurred at the time of Mr. Lanham and 20/20 Valuations’ appraisal.”
“You may or may not have heard, but I have been wrongfully accused of intentionally assigning a low value to a home in Baltimore City because of the owner’s race,” Lanham said on his GoFundMe page to cover legal fees. “I am positive that I am not the person I have been made out to be in this lawsuit or the large media outlets that have covered the situation, and I am confident in the appraisal that I completed.”
Not the first, not the last
Drs. Mott and Connolly are another chapter in a long history of Black homeowners and landowners spending their final days fighting for housing equality.
Hilton Head landowner Josephine Wright spent her final years battling developer Bailey Point Investment. The company wanted to build a 147-house neighborhood on land that had been in Wright’s family since the end of the Civil War.
Bailey Point Investment offered to purchase the land, but when Wright declined, they sued the then 92-year-old woman for ownership. Wright’s family started a GoFundMe that earned more than $365,000 and got an offer from entertainment mogul Tyler Perry to build Wright a new home.
Wright died in January at 94, about two months before Bailey Point settled. The developers promised never to contact the Wrights and agreed to build a privacy fence between the development and the family’s land.
“The family is grateful to have settled,” family spokesperson Altimese Nichole told South Carolina Public Radio. “They’re focused on keeping the legacy of Mrs. Josephine Wright alive.”
Dr. Lee Davenport
Renowned real estate coach and fair housing advocate Dr. Lee Davenport said Mott, Connolly and Wright’s experiences are a reminder of how far America has come and has yet to go in terms of fair housing.
“Unfortunately, there are so many stories that are within the news this week and even within the month that are like this,” Davenport told Inman on Wednesday. “Look at one of the survivors of the Tulsa Black Wall Street race riots; [Viola Ford Fletcher] is over 100 years old, and she’s still fighting for what she’s lost since her childhood.”
Although these Black homeowners’ stories are infuriating, Davenport said it’s important to remember that 56 years ago, Mott, Connolly, and Wright would’ve had no legal footing to fight against an unfair appraisal or stop a developer from taking their land.
“At the start of [Wright and Fletcher’s] lives there weren’t even laws that guaranteed and protected their rights and properties,” she said. “So, it’s wonderful that we have laws people can now point to and say, ‘What’s happening isn’t right.'”
Even with the progress that’s been made, Davenport said there’s much more to be done. She recalled a recent appraisal webinar where the host acknowledged issues within the industry, including resistance to using technology that could help appraisers provide accurate valuations and mitigate discrimination risks.
“They said, ‘We aren’t doing this right, and unfortunately, the old guard has resistance to using some of the new technological features to help ensure that there’s equity,'” she said. “That was interesting to hear them say that. It was like, okay, you guys do know it’s a problem.”
Still, technology isn’t a panacea, as human biases creep their way into algorithms.
“Garbage in, garbage out,” she said, echoing an adage she heard in computer science. “That’s why I encourage any real estate company or appraisal company developing and creating these amazing tools to collaborate with their local fair housing center. They can test and retest. They can help us tackle these challenges.”
Realtors, stand up
Although Mott and Connolly’s story focused on issues within lending, Davenport said it illuminates a powerful opportunity for Realtors to stand in the gap for their clients years after closing.
“Each one of us really should be a resource center. This is our job. This is what we do every day, right?” she said. “Consumers — except for those that are actually investors — may buy or sell a house every five to 15 years. That’s not really enough for them to know what’s happening. What’s the latest? What’s current.”
Davenport said Realtors must do a better job of prioritizing fair housing rights and pushing past the discomfort that comes with talking about discrimination, racism and bias.
“Think of what these families missed out on,” she said. “It’s not just money, but the fact that you have health issues and you have college to pay for. These are all the things that housing and the appreciation we gain from housing pays for.”
“We also have to remember when people don’t have fair housing it affects everyone,” she said. “It affects community property values, it affects what money is spent on schooling because community property values. It has such a role in everything.”