Saturday, July 26, 2014 - Article by: Justin Fitzhugh - Nations Lending Corporation -
In the last couple of months, HUD reached agreement with a couple of lenders that discriminated pregnant women when they applied for a mortgage during maternity leave. Last month, HUD required Mountain America Credit Union, headquartered in Utah, to pay $25K to resolve allegations of discrimination against pregnant women who applied during maternity leave. Earlier this month, the Department reached a conciliation agreement with Greenlight Financial Services, GFS Capital Holdings, to resolve discrimination allegations of the same kind. The Company was required to $48K.
HUD initiated an investigation of Mountain America Credit Union practices after a couple claimed their application was denied due to the wifes maternity leave. The Credit Union blamed its mortgage insurers income calculation guidelines for its assertion that the woman needed to be back at work before the closing of the loan to qualify. The Credit Union was required to pay $10K to the couple, and $15K to organizations who help educate the public about Fair Lending Laws.
HUD initiated an investigation of Greenlight FInancial Services after a couple complained their application had been denied due to the womans maternity leave. HUD found the lender denied and/or delayed the application of four other women who were in maternity leave. Delayed applications were approved once the women returned to work. The Agency required the Company to pay $20K to the complaining couple, and $7K to the other four women, for a total of $48K.
The Fair Housing Act, 1968, prohibits housing discrimination in lending, sales, and rental transactions based on a persons sex or family status. In the last few years, HUD has been receptive to complaints by expectant mothers, and has fined big and small mortgage lenders and insurers.
In 2011, HUD investigated and settled maternity leave discrimination charges by mortgage lenders Cornerstone Mortgage Company (Cornerstone, Houston, TX) and Mortgage Guaranty Insurance Corporation (MGIC, Milwaukee, Wisconsin). In 2012, against Bank of America (CA), Magna Bank (Nashville, TN), Home Loan Center (Irvine, CA), Land Home Financial Services (LHFS, CA), Cadence Lending/Waterstone Mortgage (Wisconsin). In 2013, against Primary Residential Mortgage (PRMI, Utah), PNC Mortgage (a division of PNC Bank, Connecticut).
Parental leave, family leave, and maternity leave are benefits granted by law. Even though we feel uncomfortable lending to pregnant women, to do so is to break the law. CLearly, HUD is receptive to these complains, and we must unless we want to risk a lawsuit, and the cost of settlements, we better buckle up, hope for the best, and welcome the application of expecting families.
Here you can learn more about the Fair Housing Act: http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/FHLaws/yourrights
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