Judge dismisses Maryland appraisal discrimination case and defamation countersuit

A federal judge has dismissed the claims of both the plaintiffs and defendants in an appraisal discrimination lawsuit that garnered national attention when it was filed in 2022.

Nathan Connolly and Shani Mott — Maryland homeowners who are Black — sued appraiser Shane Lanham, his company 20/20 Valuations and mortgage lender loanDepot for allegedly undervaluing their home by almost $300,000.

loanDepot settled the suit in 2024, and Lanham and 20/20 Valuations countersued for defamation. U.S. District Court Judge Stephanie Gallagher issued a summary judgment on Thursday that denied both the couple’s discrimination allegations and Lanham’s defamation charges.

“The Complaint itself contains fairly inflammatory statements that in the end, Plaintiffs failed to prove,” Gallagher’s judgment reads. “And Defendants have not shown that Plaintiffs filed this lawsuit in bad faith.”

Connolly and Mott sought to refinance their Maryland home in the summer of 2021, when mortgage rates were at historic lows. They claim to have paid $450,000 for the house in 2017 and made multiple improvements to the house along the way.

loanDepot approved their application at a “conservative” valuation of $550,000, but Lanham’s firm, which conducted the appraisal , valued the house at only $472,000.

Connolly, a professor at Johns Hopkins University who specializes in redlining and white supremacy, was suspicious and hired another appraiser seven months later. Prior to the valuation, the couple “whitewashed” their home by removing any evidence that the owners were Black.

The individual appraiser, Daniel Dodd, valued the home at $750,000.

The case attracted attention from major media outlets. The New York Times wrote an expose. ABC News and a local Baltimore news station interviewed the couple.

“My jaw dropped,” Mott said in the ABC interview, adding that she believed the original valuation to be “impossible.”

“I was like, this is racism. Because we had done the research, right?”

According to the summary judgment, Dodd said he now believes he made some mistakes in his appraisal that led to an overvaluation of roughly $50,000, although that doesn’t account for the entire difference between the two appraisals.

Allegations of racial bias in the appraisal industry have earned their fair share of headlines over the past few years.

In 2021, the Biden administration launched the Property Appraisal and Valuation Equity (PAVE) task force, an interagency group that investigated whether there is systemic bias in the appraisal industry. 

It concluded there is. The administration implemented new regulations aimed at better enforcing fair housing laws and developing processes by which racial bias could be weeded out of appraised valuations.

But last week, the Trump administration “effectively disbanded” the PAVE task force on the basis of complying with President Trump’s executive order to end any policies or regulations related to diversity, equity and inclusion (DEI).

“Under President Trump’s leadership, the Biden-era’s obsession with DEI and overregulation is over,” Scott Turner, secretary of the U.S. Department of Housing and Urban Development, said in a statement after ending PAVE. “At HUD, we’re restoring common sense and putting the American Dream of homeownership back within reach.”

Coincidentally, on Thursday, Georgia Sen. Ralph Warnock introduced the Appraisal Modernization Act, which would effectively rewrite into law some functions of the dismantled PAVE task force.