More than 97 percent of home appraisers in the U.S. are white, prompting questions about systemic racism and inherent bias.
A Black Maryland couple says their house was undervalued by an appraiser last year by nearly $300,000 — that is, until they sent a white friend stand in as the owner for a second appraisal.
Dr. Nathan Connolly and his wife, Dr. Shani Mott, were looking to take advantage of low interest rates and refinance their Baltimore home, according to The New York Times. They had recently completed more than $40,000 in renovations and were convinced that its value had increased since it was purchased in 2017.
Maryland appraisal company 20/20 Valuations determined the home’s value was $472,000, and the couple was subsequently denied a refinance loan.
But Nathan Connolly, who is a professor of history at Johns Hopkins University, believed that he and his family were victims of discrimination. And he’d certainly recognize it: His specialty is the study of the legacy of white supremacy in American cities, with a particular interest in redlining and the role of race in the housing industry.
He and his wife, who have three children, decided to try their own experiment: They removed all traces of their family’s Blackness from their home, reported The Times, and had a white male John Hopkins professor act as its owner for a second appraisal. This time, the house was valued at $750,000.
The family has since filed a racial discrimination lawsuit against mortgage lender loanDepot, who denied them the loan, and Shane Lanham, the owner of 20/20 Valuations, who was hired by loanDepot and conducted the first appraisal.
“We were clearly aware of appraisal discrimination,” Dr. Connolly, 44, told The Times. “But to be told in so many words that our presence and the life we’ve built in our home brings the property value down? It’s an absolute gut punch.”
In their lawsuit, the couple alleges that Latham “cherry-picked low value homes as comps” and “ignored legitimately comparable homes with much higher sales prices.”
Neither loanDepot nor 20/20 Valuations responded to The Times’ request for comment.
The report notes that more than 97 percent of home appraisers are white, which has prompted calls to study the industry’s systemic bias. The Connolly/Mott family members are not the first victims to allege that their home appraisals were lowballed based on race. Several accusations caught national attention, prompting last year’s creation of the Interagency Task Force on Property Appraisal and Valuation Equity, which aims to evaluate the causes of appraisal bias and execute an action plan to root it from the industry. It’s being led by Housing and Urban Development Secretary Marcia Fudge, with former Ambassador Susan Rice as co-chair.
The task force was launched on June 1, 2021, the centennial of the Tulsa Race Massacre, according to its website. Its members are directed to “evaluate the causes, extent, and consequences of appraisal bias and to establish a transformative set of recommendations to root out racial and ethnic bias in home valuations.”
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