Loans

Loandepot, Maryland couple settle racial bias lawsuit



A Maryland couple agrees to settle Lawsuit against Loandepotthe company claimed that allegedly discriminatory, undervalued home appraisals led lenders to deny their refinance applications.

As part of the settlement, the estates of defendants Nathan Connolly and Shani Mott Passed away in mid-Marchwill receive an undisclosed amount from the lender to settle damages and legal costs.

While Loandepot denies allegations of wrongdoing, the store also vowed to strengthen its evaluation policies and practices to “ensure[e] The settlement, released on March 22, said it “provides customers with fair loan protections.”The complaint and settlement agreement were first filed by New York Times.

The Foothill Ranch, Calif.-based lender has pledged to emphasize to applicants their right to request a reconsideration of value (ROV), flag appraisals that indicate potential bias, require annual training for its customer service staff and provide appraisers with necessary of training partners receive training on fair housing laws and regulations. Most terms in the settlement agreement are valid for three years.

A spokesperson for Loandepot stressed that the company “strongly opposes bias in the home finance process”.

“While we continue to deny the specific allegations in this lawsuit and have not admitted wrongdoing, we are proud of the commitments announced today, which will formalize many of our existing practices and provide additional resources to assist our clients. Conduct assessments and assessments. Review the process,” he said.

The couple first filed the complaint in 2022, alleging that appraiser Shane Lanham, the sole owner of 20/20 Valuations in Parkville, Maryland, undervalued their home in 2021. At the time, Lanham said the home was worth their property at $472,000, well below the $550,000 estimated by Loandepot loan officers. The couple claimed the assessment was a dubious calculation based on Lanham’s alleged “racist beliefs.”

After the appraisal process, Loandepot denied the couple’s refinancing application because the valuation was too low, and loan officer Christian Jorgensen apparently responded to the couple’s concerns by giving them an incorrect appeal deadline and stop returning their calls for a few months.

According to the lawsuit filed in the U.S. District Court for the District of Maryland, Connolly and Mott obtained a higher home appraisal and a refinance loan from another lender after “painting” their home for another appraiser. At $750,000, it’s nearly 60% higher than Lanham’s estimated value. The couple, both professors at Johns Hopkins University, live in their hometown, a small, historically white, predominantly white community in north Baltimore.

March 2023 Department of Justice and Consumer Financial Protection Bureau Jointly filed a statement of interest in the case, highlighting “broader efforts to ensure a fair and accurate assessment of our residential mortgage market.”

Legal documents say the settlement with Loandepot does not resolve or relieve any claims brought by Shane Lanham or 20/20 Valuations in the civil lawsuit.





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