The husband and wife sought to purchase a home and were set to take out a loan with loanDepot. The appraisal was conducted by a third-party appraiser who valued the property at an amount significantly lower than the contract price agreed upon by the couple and lender. The lawsuit alleges that the appraiser used a compilation of false comparables to devalue the property, discriminating against the couple on the basis of their race and national origin.
The couple claims that after discovering the devaluation of their property, they submitted a formal complaint to loanDepot. Representatives of the loanDepot attempted to remedy the situation by providing an adjustment to the appraisal, however this adjustment was still below the contract price. As a result of this conflict, the couple contacted a local news station to bring the issue to light.
This case serves as a reminder of a long history of discrimination against black people within the housing market. From redlining to modern-day discriminatory practices that devalue homes of people of color, people of color are consistently exposed to racially motivated disparities when it comes to home buying. It is not uncommon for lenders to falsely categorize certain neighborhoods as ‘declining’ or ‘poor’ in order to deny loans or inflate interest rates. Furthermore, appraisers are often not held accountable for valuing homes lower based on the fact that individuals of color resided in them.
The couple’s lawsuit directly addresses the racist appraisal practices known to occur in the housing market. This case serves as a notice to all lenders that racial bias will no longer be tolerated and that racial disparities will be met with legal recourse. In addition to addressing the disparities present within the housing market, this case also brings to light the importance of holding all third-party vendors associated with a lender accountable for discriminatory activities.
At present, the lawsuit is still pending and no verdict has been reached. However, this case serves as a reminder of the need for reform and increased accountability within the housing market. If successful, this lawsuit could pave the way for a more equitable housing market, free of racial discrimination.
This article was contributed on Dec 12, 2023