November 6, 2013
The U.S. Department of Housing and Urban Development issued a recent press statement announcing, “Bank of America will pay $45,000 as part of Conciliation Agreements resolving allegations the lender discriminated against pregnant women seeking mortgage loans. HUD had alleged that the Bank of America refused to refinance the mortgages of two couples in California and Texas, because the women were on maternity leave.”
We write a great deal of articles here about home loans, and one of the most important aspects of being an informed borrower is knowing your rights under the Fair Housing Act. As the FHA/HUD press release points out, refusing a mortgage or denying a borrower mortgage insurance because the applicant is pregnant or on family leave is a violation of the Fair Housing Act.
“No lender should use a woman’s pregnancy or maternity leave as a reason to deny a mortgage loan,” said Bryan Greene, HUD Acting Assistant Secretary for Fair Housing and Equal Opportunity. He was quotes in the HUD press release, HUDNo.13-153, adding, “We commend Bank of America for working cooperatively with the Department of Housing and Urban Development in reaching appropriate resolutions of these complaints. Bank of America took affirmative steps to work with government regulators to ensure that its new policies did not conflict with lending guidelines.”
That press release details the complaints from two couples–one from California, the other from Texas. In the California case, it was alleged that, “Bank of America moved back the closing date on their mortgage refinance because the woman was on maternity leave.”
The press release adds, “The other couple, from Humble, Texas, alleged that Bank of America refused to consider the wife’s employment income and denied their application for a mortgage loan because she was on maternity leave. The couple further alleged that when their real estate agent told the loan officer that denying the loan because of the woman’s maternity status violated the Fair Housing Act, the loan officer changed his reasons for denying the loan. The couple ultimately obtained a mortgage from a different lender.”
The FHA and HUD announced that Bank of America plans to, “revise its policies to allow applicants on parental leave to be approved for mortgage loans without first returning to active work status. Bank of America will also conduct fair lending training for its employees.”
Borrowers are often the only line of defense against this kind of discrimination–complaining to the proper authorities can help prevent further discriminatory action. As the FHA/HUD press statement says, if you feel you have been the victim of this type of discrimination by any lender, contact HUD at 1-800-669-9777.
Do you have questions about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
Browse by Date: