Credit Union To Pay $25K For Violating Fair Housing Act

Posted by Patrick Barnard on June 25, 2014 No Comments
Categories : Residential Mortgage

Utah-based Mountain America Credit Union will pay $25,000 to settle allegations brought by the U.S. Department of Housing and Urban Development (HUD) that it discriminated against prospective borrowers on maternity leave, thus violating the Fair Housing Act.

The settlement follows an investigating by HUD into the allegations of a married couple that claimed their mortgage loan application was wrongly denied because the wife was on maternity leave. The couple settled their complaint in 2013.

Mountain America claimed that its mortgage insurer's guidelines for calculating income for women on maternity leave allowed regular pay to be considered only if the women returned to work before the loan closed.

‘The birth of a child, a joyous event for a family, should not become the basis for denying that family a home mortgage,’ says Bryan Greene, general deputy assistant secretary for fair housing and equal opportunity for HUD, in a statement. ‘HUD will continue to enforce fair housing laws to ensure that no family is denied the opportunity to buy a home because of maternity, paternity or pregnancy leave.’

Under the terms of the agreement, Mountain America will pay $10,000 to an affected borrower identified during HUD's investigation and $15,000 to a qualified organization to help educate the public about fair lending requirements and obligations, including the rights of borrowers on maternity, paternity, pregnancy or parental leave.

In addition the company will adopt a parental leave policy consistent with the Fair Housing Act with regard to calculation and treatment of maternity, paternity and pregnancy leave income, and identify when employment income may be used based upon the timing of a scheduled return to work date.

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