Settlements have been reached between the Department of Housing and Urban Development and two lenders, including an affiliate of LendingTree.com. At issue is alleged discrimination involving women on maternity leave.
HUD announced the settlements on Thursday.
The two lenders allegedly denied mortgages to women who were pregnant on temporary maternity leave in violation of the Fair Housing Act.
The companies are Nashville, Tenn.-based Magna Bank and Irvine, Calif.-based Home Loan Center Inc.
Magna Bank has agreed to pay one woman $14,085 as part of the settlement.
Home Loan Center, which is currently in the process of being sold to Discover Financial Services from LendingTree parent Tree.com, is required to pay a Las Vegas woman $15,000 as part of its settlement.
“It is against the law for any lender to deny a mortgage loan to a woman because she is pregnant or on paid maternity leave,” HUD Assistant Secretary for Fair Housing and Equal Opportunity John Trasviña said in the press release. “Women shouldn’t have to choose between buying or refinancing a home and exercising their right to have a family. HUD will take appropriate action anytime we determine that discrimination has occurred.”
In a settlement announced on June, 1, 2011, with Cornerstone Mortgage Co., HUD explained that the Federal Housing Administration requires mortgagees to review a borrower’s income to determine whether they can reasonably be expected to continue paying their mortgage, but they can’t inquire about future maternity leave.
A lawsuit announced at the same news conference against MGIC Investment Corp. alleged that the mortgage insurer denied coverage to Carly F. Neals because she was on maternity leave and couldn’t be approved for mortgage insurance until she returned to work on a full-time basis.
“If a borrower is on maternity or short-term disability leave at the time of closing, lenders must document the borrower’s intent to return to work, that the borrower has the right to return to work, and that the borrower qualifies for the loan taking into account any reduction of income due to their leave,” HUD said at last year’s news conference.