loanDepot has settled
a
lawsuit
filed
by
a
Maryland
couple
accusing
the
firm
of
appraisal
bias,
ending
a case that
gained
national
attention
two
years
ago. 

Court
documents
filed
on
March
22
show
that
the
lender
and
plaintiffs
Nathan
Connolly
and
Shani
Mott
—
the
latter
a
scholar
of
Black
studies
at Johns
Hopkins
University who

died
March
12
in
Baltimore
of
adrenal
cancer
—
agreed
with
a
voluntary
dismissal
with
prejudice.

California-based
loanDepot
will
pay
an
undisclosed
amount
and
commit
to
improving
its
mortgage
appraisal
practices.
But
the
company
hasn’t
admitted
any
fault.  

In
a
suit
filed
in
August
2022,
the
Maryland
couple
accused
loanDepot
and
appraisal
firm 20/20
Valuations
—
including
company
president
Shane
Lanham
and
the
appraiser
who
performed
the
valuation
—
of

racial
bias
after
their
home
was
appraised
at
a
far
lower
value
than
it
was
a
few
months
later
when
they
removed
indications
that
a
Black
family
lived
there. 

They
conducted
a
“whitewashing”
experiment,
replacing
family
photos
with
pictures
of
white
friends
and
colleagues.
Instead
of
Connolly
and
Mott
greeting
the
appraiser,
a
white
colleague
was
present
during
the
process. 

The
home
was
appraised
for
$750,000,
almost
60%
higher
than
the
initial
appraisal
performed. 

They
claimed
loanDepot
“discriminated
and
retaliated
against
them
by
failing
to
overturn”
the
first

appraisal
and/or
order
them
a
new
appraisal,
thereby
violating
several
rules,
including
the
Fair
Housing
Act
and
the
Equal
Credit
Opportunity
Act.

A
spokesperson
for
loanDepot
told HousingWire that
the
company
“strongly
opposes
bias
in
the
home
finance
process.”

“While
we
continue
to
deny
the
specific
allegations
in
this
lawsuit
and
have
made
no
admission
of
fault,
we’re
proud
of
the
commitments
announced
today,
which
will
formalize
many
of
our
existing
practices
and
provide
additional
resources
to
help
our
customers
in
the
appraisal
and
review
process,”
the
spokesperson
wrote
in
an
emailed
response.  

The
attorney
for
the
plaintiffs
did
not
immediately
responded
to
a
request
for
comments.

The
settlement
requires
loanDepot
to
implement
enhancements
to
its
mortgage
appraisal
policies
and
procedures
within
120
days. 

The
changes
include
communicating
to
applicants
that
they
have
the
right
to
request
a

reconsideration
of
value
(ROV);
explaining
why
an
ROV
is
denied
or
the
valuation
is
unchanged;
and
training
its
credit,
valuation
and
customer
service
staff
on
the
topic. 

The
document
states
that
loanDepot
“should
not
utilize
appraisers
who
have
previously
been
found
to
have
discriminated
in
an
appraisal
by
a
regulatory
body
of
court
of
law.” 

The
settlement
agreement
does
not
resolve
or
release
any
claims
against
20/20
Valuations
and
Lanham.  

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