The U.S. Department of Housing and Urban Development (HUD) recently announced that it has reached yet another agreement with a mortgage lender that apparently discriminated against a woman on maternity leave. The lender entered into the agreement to settle allegations that it denied woman a mortgage loan because she was pregnant and on maternity leave.
The Fair Housing Act prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on sex, race, color, national origin, religion, familial status, or disability. Refusing to approve a mortgage loan or to provide refinancing because a woman is pregnant or on maternity leave violates the Fair Housing Act’s prohibitions against sex and familial status discrimination.
The woman, who applied for the loan in her name, and her husband filed a complaint with HUD alleging discrimination after a loan officer told her that she was a “good risk” and that the lender would be willing to finance her loan, but only after she returned to work. After being unable to get a loan from the lender, the woman and her husband applied for a loan with another lender and were approved.
Under the terms of the agreement, the lender will pay the woman $13,000 and adopt a parental leave policy with respect to loan applications to ensure compliance with the Fair Housing Act. In addition, loan officers, processors, underwriters and decision makers will be trained on the Act and the new policy. The Parental Leave Policy applies to men as well as women who are on parental leave due to the birth or adoption of a child and prohibits inquiries concerning a person’s future parental leave plans.
We have seen several similar cases in the past 30 months. It is important that all lenders follow the action of the lender in this case – adopt a Parental Leave Policy and train all lending staff on the Fair Housing Act and on the Policy.
A copy of the Conciliation Agreement is available here.