September 17, 2014
The FHA/HUD official site recently issued a press release stating there was a settlement in a housing discrimination case involving a home loan applicant on maternity leave. According to HUDNo.14-105, “The U.S. Department of Housing and Urban Development announced today that Jackson, TN-based mortgage lender FirstBank Mortgage Partners will pay $35,000 to settle allegations that it violated the Fair Housing Act when it denied a mortgage loan to a couple because one applicant was on maternity leave.”
Federal housing laws forbid lenders from discriminating against home loan applicants, “in the terms, conditions, or privileges associated with the sale or rental of a dwelling on the basis of sex or familial status, including denying a mortgage loan or mortgage insurance because an applicant is pregnant or on maternity leave.”
According to the press release, the settlement resolves a complaint filed by a couple who claimed FirstBank first approved, then later denied a home loan application based on the maternity leave status of one of the applicants.
“The Conciliation Agreement resolves a complaint filed with HUD by a married couple who alleged that after FirstBank had approved their application and scheduled its closing, FirstBank learned that the wife was on maternity leave and notified the couple within 24 hours of the scheduled closing that the loan was denied. The couple alleged that they then lost the opportunity to buy a home in Virginia. The couple allegedly also lost their current housing, requiring the wife and infant twins to move in with her parents while the husband moved to an apartment with their three-year old.”
Part of the complaint in this particular case? The lender allegedly, “did not consider the couple’s ability to make loan payments during the wife’s maternity leave, ignoring the husband’s salary and the wife’s short-term disability insurance payments” according to the HUD press release.
“No qualified applicant should be denied a mortgage loan solely because they take maternity, paternity or parental leave,” said Gustavo Velasquez, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “HUD will continue to enforce the nation’s fair housing laws to ensure no one is illegally denied the opportunity to own a home.”
FHA/HUD reports that FirstBank Mortgage Partners are required to pay restitution to the couple, and agrees to “adopt a national paternal leave policy and receive annual fair housing and fair lending training.”
If you feel you have been discriminated against in the home loan application process, contact the HUD Office of Fair Housing and Equal Opportunity at (800) 669-9777 (voice) or (800) 927-9275 (TTY).
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.
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