Mortgage Daily Logo
mortgage news from industry experts

Another Mortgage Settlement Over Maternity Policies

A California company has become the latest lender to settle charges that it discriminated against a loan applicant who was on maternity leave. Several similar settlements have recently been announced.

The Department of Housing and Urban Development disclosed Friday a settlement with Land Home Financial Services.

The agreement resolves allegations that the Concord, Calif.-based lender violated the Fair Housing Act.

It got into trouble when it refused to approve the loan application of a California couple because the wife was on maternity leave. A pre-approval letter was sent in response to a loan application, but Land Home required that the wife return to work after she gave birth so that she would earn a full two-week paycheck by the time escrow closed.

As a result, the borrower ended her maternity leave early and returned to work 19 days after delivering a baby.

“Refusing to approve a mortgage loan or provide refinancing because a woman is pregnant or on maternity leave violates the Fair Housing Act’s prohibitions against sex and familial status discrimination,” HUD stated.

Land Home will pay $20,000 to the borrowers as part of the settlement. In addition, it will ensure that its own underwriting policies on maternity and pregnancy leave income would be changed to conform to Fannie Mae’s and Freddie Mac’s guidelines.

HUD Assistant Secretary for Fair Housing and Equal Opportunity John Trasviña noted in the announcement that the settlement is one in a series of enforcement actions by HUD against lenders that deny women for a residential loan because they are pregnant or on maternity leave.

Recent Maternity Discrimination Settlements:

  • In June, Bank of America Corp. agreed to pay as much as $161,180 to settle charges that it discriminated against a woman on maternity leave.

  • The Department of Justice announced in May a $540,000 settlement with MGIC Investment Corp. The case was initiated by HUD after it found that the mortgage insurer allegedly denied coverage to Carly F. Neals because she was on maternity leave.

  • HUD announced in April separate settlements with Magna Bank and Home Loan Center Inc. over similar charges of discrimination against women on maternity leave.

  • A maternity discrimination settlement with Cornerstone Mortgage Co. was announced in June 2011 by HUD.

Trasviña proclaimed in today’s statement, “We will continue to pursue maternity leave discrimination until it is eliminated.”

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...


Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI

Related Posts