October 4, 2013
The FHA/HUD official site has a recent press release announcing a settlement in a maternity leave discrimination case brought against a Wisconsin-based mortgage insurance company. According to HUDNo.13-149, “The U.S. Department of Housing and Urban Development (HUD) announced today that it has reached agreements to settle two Fair Housing Act complaints against Madison, WI-based CMG Mortgage Insurance Company (CMG MI), the nation’s largest provider of private mortgage insurance to credit unions.”
That company has agreed to pay $30,000, “resolving allegations that it refused to insure the home mortgage loan of a married couple because the wife was on maternity leave, and that it maintained a written policy of refusing to consider the regular pay of women on maternity leave as income.”
As the press release points out, federal law prohibits discrimination in mortgage lending and residential real estate-related transactions, “based on race, color, national origin, religion, sex, family status or disability. These prohibitions include refusing to approve a mortgage loan or to provide mortgage insurance because a woman is pregnant or on maternity leave.”
“A woman’s maternity leave is not a legitimate basis for a lender to deny a mortgage loan or for an insurer to deny mortgage insurance,” said Bryan Greene, HUD Acting Assistant Secretary for Fair Housing and Equal Opportunity. “This settlement will allow families all over the country to obtain home loans without respect to their family leave status.”
All of this stems from a complaint by a married couple, “seeking to refinance their home mortgage loan through a credit union. The credit union allegedly denied the application because the woman was on maternity leave, citing CMG MI’s guidelines for calculating income for women on maternity leave, which allowed for regular pay to be considered only if the applicant returned to work before the loan closed.”
Borrowers are often the first line of defense against this kind of discrimination–reporting suspected discrimination is the only way to bring the practices to a halt. You can file a complaint by contacting HUD’s Office of Fair Housing and Equal Opportunity at (800) 669-9777 (voice) or (800) 927-9275 (TTY).
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.
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