A federal judge has dismissed a high-profile case involving allegations that a home appraiser was racially biased in his appraisal.
U.S. District Judge Stephanie A. Gallagher of the U.S. District Court for the District of Maryland ruled that Nathan Connolly and the estate of Shani Mott, who passed away in March of 2024, failed to provide an appraisal expert to support their claims against Shane Lanham and his company, 20/20 Valuations, LLC.
“An expert is necessary to explain the proper methodology for an appraisal and to assess whether the Defendants complied with industry standards,” the judge ruled. “Defendants have put forth such an expert, and Plaintiffs have not.”
She added, “Because the Plaintiffs have failed to create a genuine issue of material fact as to whether Defendants’ legitimate nondiscriminatory reason [for the basis of the appraised value] was pretextual, summary judgment must be granted in Defendants’ favor on all counts.”
Connolly and Mott, a Black couple, purchased their home in Baltimore in 2017 for $450,000. Four years later, after investing in home improvements, the couple sought to refinance their mortgage through loanDepot.com. An appraisal management company hired Connolly and his firm to conduct an appraisal. In the end, Connolly appraised the couple’s home for $472,000 and their refinancing application was denied
In January, 2022, seven months after the first appraisal, another appraiser valued the house at $750,000. For that appraisal, the couple reportedly removed all evidence that a Black family lived in the home.
The couple filed suit against Lanham, alleging that he dramatically undervalued their home because of their race and because of their home’s location, adjacent to the only area of a generally white neighborhood with a significant Black population. The case received a great deal of media attention, including a story in the New York Times and one on ABC News.
Lanham contended that his appraisal was conducted in a fair and reasonable manner and aligned with professional norms and standards. A particular factor in Lanham’s valuation was the location of the home on a busy road.
Lanham produced two expert witnesses with, collectively, over 50 years of appraisal experience, to support his position, according to the judge.
Connolly and Mott, on the other hand, relied on Dr. Junia Howell, a sociology professor at the University of Chicago, to support their claims. Judge Gallagher excluded portions of Dr. Howell’s testimony, saying she is not an appraiser and has no experience conducting appraisals.
“Her analysis does not—and could not—rebut Defendants’ position that their appraisal was fair, reasonable, and well explained, nor does it affirmatively show that the appraisal was the result of intentional racial discrimination,” the judge ruled.
She added, “Without the foundation in appraisals necessary to explain the significance of these distinctions, this Court has no way to place them in context.”
In a related development, the Department of Housing and Urban Development and the Office of Management and Budget have disbanded the Biden-era Property Appraisal and Valuation Equity (PAVE) task force. The group had been formed to investigate discrimination in the appraisal industry.
“Established in 2021, the PAVE task force exemplified government overreach by increasing bureaucracy using various tools aimed at addressing so-called systemic biases in the home appraisal process,” Trump Administration officials said.
They added, “The termination of specific policies eliminates unnecessary regulatory hurdles imposed on lenders, appraisers, and other program participants, which will allow HUD’s Federal Housing Administration (FHA) to better serve American homebuyers and homeowners.”
[View source.]
