August 29, 2013
The FHA/HUD official site has issued a press release announcing charges against Fifth Third Bank, Fifth Third Mortgage Company and Cranbrook Mortgage Corporation.
According to HUDNo.13-128, “The U.S. Department of Housing and Urban Development (HUD) announced today that it is charging Fifth Third Bank, Fifth Third Mortgage Company and Cranbrook Mortgage Corporation with discriminating against a couple with disabilities who were attempting to refinance their home mortgage. HUD’s charge alleges that the Cincinnati, Ohio-based mortgage lender and the Clinton Township, Michigan-based mortgage broker required unnecessary medical documentation in order to qualify the couple for a Federal Housing Administration (FHA) loan.”
Fair Housing Act laws forbid discrimination in the home loan process or loan modification process, “based on disability, race, color, religion, national origin, sex, or family status, including imposing different application or qualification criteria” according to the FHA/HUD press release which adds, “Persons with disabilities should not have to meet higher mortgage qualification standards because they rely on disability insurance payments as a source of income,” said Bryan Greene, HUD’s Acting Assistant Secretary for Fair Housing and Equal Opportunity.
Green also says, “Banks and mortgage companies may verify income and have eligibility standards, but they may not single out homebuyers with disabilities or deny financing when they are otherwise qualified.”
According to the press release, the discrimination charges come after a married couple that receives Social Security Disability Insurance (SSDI) benefits complained, “claiming that their application for an FHA-insured home refinance loan was unfairly denied. According to HUD’s charge, the lender and mortgage broker made statements and employed written policies requiring the couple to provide physician statements to establish continuance of SSDI income. The charge alleges that at the time of the couple’s loan, Fifth Third’s underwriting policy explicitly specified a physician’s statement as appropriate evidence for establishing continuance of disability income.”
Fair housing rules create a situation where the lender is permitted to “verify an applicant’s income amount and source” according to HUD, but the lender is forbidden to “place higher qualification standards on applicants who receive disability income.” In this case, the couple refused to furnish physician statements and were turned down for their home loan. The next steps in the case are described in the press release:
“HUD’s charge will be heard by a United States Administrative Law Judge unless any party to the charge elects to have the case heard in federal district court. If an administrative law judge finds after a hearing that discrimination has occurred, he may award damages to the complainants. The judge may also order injunctive relief and other equitable relief to deter further discrimination, as well as payment of attorney fees. In addition, the judge may impose fines in order to vindicate the public interest. If the matter is decided in federal court, the judge may also award punitive damages.”
Have you experienced housing discrimination? 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).
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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