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Press Release

Justice Department and Consumer Financial Protection Bureau File Statement of Interest in Appraisal Discrimination Case

For Immediate Release
Office of Public Affairs

The Justice Department and the Consumer Financial Protection Bureau (CFPB) announced today that they filed a statement of interest to explain the application of the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA) to lenders relying on discriminatory home appraisals. The statement of interest was filed in Connolly, et al. v. Lanham, et al., a lawsuit currently pending in the U.S. District Court for the District of Maryland alleging that an appraiser and a lender violated the FHA and ECOA by lowering the valuation of a home because the owners were Black and by denying a mortgage refinancing application based on that appraisal. 

“Discriminatory home appraisals are unlawful, perpetuate the racial wealth gap, and deny communities of color the benefits of homeownership,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “When appraisers or lenders treat homebuyers or homeowners differently because of race, they violate federal law. The Justice Department is working to ensure an open and fair housing market by taking on appraisal bias, modern-day redlining, discriminatory loan pricing practices, and other forms of discrimination that may rear their ugly head at any stage of the home-buying process.”

“The requirement that applicants and homeowners be treated equally is not new,” said U.S. Attorney Erek L. Barron for the District of Maryland. “Appraisal bias is a serious and ongoing issue in this country, and it is critical that the United States ensures the proper construction and application of the Fair Housing Act and the Equal Credit Opportunity Act to hold appraisers and lenders accountable.”

“Lenders that discriminate against people seeking homeownership perpetuate inequities that prevent communities from thriving,” said CFPB Deputy Director Zixta Martinez. “CFPB's Statement of Interest filing with the Justice Department is one piece of our broader efforts to ensure fair and accurate appraisals in our residential mortgage markets.”

The Connolly lawsuit was filed by plaintiffs Nathan Connolly and Shani Mott, who sought a refinance loan for their home in Baltimore. The plaintiffs allege that the appraiser, Shane Lanham, significantly undervalued their home at $472,000 because they are Black. They also allege that they told the lender, LLC (loanDepot), that the appraisal was discriminatory, but that loanDepot still denied the loan and retaliated against them. When their home was later evaluated by a different appraiser, the plaintiffs replaced their family photos with photos borrowed from white friends and colleagues and enlisted a white colleague to pose as the homeowner. This appraisal resulted in a valuation of $750,000 – an increase of almost 60%.

The defendants have moved to dismiss the case, and the plaintiffs have opposed the defendants’ motions. Through the statement of interest, the department and the CFPB address three legal principles incorrectly represented in loanDepot’s motion to dismiss. First, the statement sets out the appropriate pleading standard for disparate treatment claims under the FHA and ECOA. Second, the statement clarifies that it is illegal for a lender to rely on an appraisal that it knows or should know to be discriminatory. Third, the statement explains that a violation of Section 3617 of the FHA does not require an underlying violation of another provision of the FHA. The motions to dismiss are currently pending before the court.

The FHA prohibits discrimination in housing on the basis of race, color, religion, sex, familial status (having one or more children under 18), national origin and disability. ECOA prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, because an applicant receives income from a public assistance program or because an applicant has in good faith exercised any right under the Consumer Credit Protection Act.

More information about the Civil Rights Division and the laws it enforces is available at More information about the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) is available at

Individuals may report housing discrimination to the Justice Department by calling 1-833-591-0291, emailing, or submitting a report online. Individuals also may report housing discrimination to Department of Housing and Urban Development by calling 1-800-669-9777 or filing a complaint online. In addition, individuals may report credit discrimination to the Consumer Financial Protection Bureau at 1-855-411-2372 or online.

Updated March 13, 2023

Civil Rights
Fair Housing
Press Release Number: 23-276