As part of the settlement, the plaintiffs, Nathan Connolly and the estate of Shani Mott, who passed away in mid-March, will receive an undisclosed sum from the lender to resolve damages and attorneys' fees. 

Though Loandepot denies allegations of wrongdoing, the shop also vowed to beef up its appraisal policies and practices to "ensur[e] fair lending protections for customers," the settlement published March 22 said. The complaint and the settlement were first reported by the New York Times.

The Foothill Ranch, California-based lender has promised to highlight to applicants that they have the right to request a reconsideration of value (ROV), flag appraisals that indicate potential bias, require annual training for its customer service staff and make it necessary for appraiser partners to receive training in fair housing laws and regulations. Most items of the settlement will be in effect for three years.

A spokesperson for Loandepot highlighted that the company "strongly opposes bias in the home finance process."

"While we continue to deny the specific allegations in this lawsuit and have made no admission of fault, we're proud of the commitments announced today, which will formalize many of our existing practices and provide additional resources to help our customers in the appraisal and review process," he said.

The complaint, first lodged by the couple in 2022, alleged that appraiser Shane Lanham, the sole owner of Parkville, Maryland-based 20/20 Valuations, low-balled the appraisal of their home in 2021. At the time, Lanham said the value of their property was $472,000, far below a Loandepot lending officer's estimate of $550,000. The couple contended the appraisal was based on questionable calculations stemming from Lanham's alleged "racist beliefs."

Following the appraisal process, Loandepot rejected the couple's refi application based on the low valuation, and lending officer Christian Jorgensen allegedly answered the couple's concerns by giving them an incorrect deadline to appeal and stopped responding to their calls for months. 

Connolly and Mott later received a higher home valuation and secured a refi loan with a different lender, after "whitewashing" their home for another appraiser, according to the suit filed in the U.S. District Court for the District of Maryland. The new appraisal came in at $750,000, almost 60% higher than Lanham's appraisal. The couple, both professors at John Hopkins University, lived in Homeland, a small, historic and predominantly white neighborhood in north Baltimore. 

In March 2023, the Justice Department and the Consumer Financial Protection Bureau jointly filed a statement of interest in the case, highlighting a "broader effort to ensure fair and accurate appraisals in our residential mortgage markets."

The settlement with Loandepot, does not resolve or release any claims in this civil action by or against Shane Lanham or 20/20 Valuations, legal documents said.