While there have been plenty of settlements over the past three years related to alleged maternity leave discrimination, none has been as big as the one reached by Wells Fargo & Co.’s mortgage unit.
The U.S. Department of Housing and Urban Development reports that it has reached 40 maternity leave discrimination cases for nearly $1.5 million.
Firms involved in the settlements are accused of violating the Fair Housing Act by denying loans to applicants who are on maternity leave.
An announcement Thursday from HUD indicated that it has more than quadrupled its proceeds with its latest settlement.
Wells Fargo Bank, N.A., doing business as Wells Fargo Home Mortgage, has become the latest company to settle such discrimination charges with HUD.
A conciliation agreement has Wells Fargo paying $5 million.
According to HUD, the Des Moines, Iowa-based lender allegedly discriminated against women applying for Federal Housing Administration-insured loans who were pregnant or postnatal and were on maternity leave.
The conciliation agreement resulted from six families in five states who filed complaints with HUD.
“I’m committed to leveling the playing field for all families when it comes to mortgage lending,” HUD Secretary Julián Castro stated in the news release. “These types of settlements get us closer to ensuring that no qualified family will be singled out for discrimination.”
HUD said that $165,000 will go to the six families who filed the complaints.
Another $3.5 million will be placed in a fund to compensate up to 250 other applicants who allegedly faced discriminatory practices by Wells Fargo. This group will receive up to $20,000 each.
Those who file claims after the first 250 will share in the remaining proceeds.
Wells Fargo agreed to change its underwriting guidelines for evaluating applications from those on maternity leave to ensure they are not discriminatory.
In addition, Wells Fargo agreed to implement new temporary leave underwriting guidelines clarifying how underwriters must evaluate and process applications from applicants on parental leave or including maternity leave. Instructions will be issued to its staff about how to implement the guidelines.
Shortly after the publication of this story, Wells Fargo provided the following statement:
| We resolved these claims to avoid a lengthy legal dispute so we can continue to serve the needs of our customers. Our underwriting is consistent with longstanding fair and responsible lending practices and our policies do not require that applicants on temporary leave return to work before being approved. HUD found no violation of the Fair Housing Act or any other law by Wells Fargo. The agreement resolves claims related to only five loan applications from a period when Wells Fargo processed a total of approximately 3 million applications from female customers. |
Mortgage Daily has tracked 15 maternity settlements with HUD and other agencies since 2011 for a total of $7.3 million, as shown in the table below.
| Date | Company | Amount |
| Oct 2014 | Wells Fargo Home Mortgage | $5,000,000 |
| Sep 2014 | FirstBank Mortgage Partners | $35,000 |
| Jul 2014 | Greenlight Financial Service | $27,000 |
| Jun 2014 | Mountain America Credit Union | $25,000 |
| Nov 2013 | Bank of America | $45,000 |
| Oct 2013 | CMG Mortgage Insurance Co. | $30,000 |
| May 2013 | SunTrust Mortgage Inc. | $36,000 |
| Apr 2013 | Primary Residential Mortgage Inc. | $15,000 |
| Feb 2013 | PNC Mortgage | $13,000 |
| Nov 2012 | Mortgage Guaranty Insurance Corp. | $1,015,000 |
| Sep 2012 | Land Home Financial Services | $20,000 |
| Jun 2012 | Bank of America Corp. | $261,180 |
| Apr 2012 | Magna Bank | $14,085 |
| Apr 2012 | Home Loan Center Inc. | $15,000 |
| Jun 2011 | Cornerstone Mortgage Co. | $765,000 |
